Government has productive partnership with business, but some detract from it – BLSA

While a large part of government contributes to a productive partnership with business, there are still some elements that detract from it.

Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says in her weekly newsletter that it was a good signal of the relationship between business and government that President Cyril Ramaphosa addressed the annual general meeting of Business Unity South Africa last week.

“His speech highlighted many of the achievements that our partnership has led to, including five months of no load shedding. He noted the important progress on logistics, with business helping Transnet’s rail and port units with technical support and resources, as well as the work we are doing to support the fight against crime and corruption.”

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More areas for government partnership with business

He also highlighted areas in where government and business must do more work together, such as overhauling the visa regime to attract critical skills, investment and tourism, improving the funding of small businesses, and perhaps most pressingly, working to tackle unemployment.

“I was also strongly encouraged by the president’s comments on prioritising the growth of exports by improving the global competitiveness of local industries, as well as streamlining export processes. Export competitiveness should be the focus of our industrial policy and I hope the president’s words signal a shift from the previous administration’s focus on protectionism and localisation.”

She also notes that the president emphasised the importance of encouraging investment, referring to the role of public-private partnerships to efficiently bridge the gaps in public resources. Overall, she says the president’s words were positive for the momentum of delivery from the partnership between business and government.

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Human settlements minister lays into banks

However, she says days earlier she was taken aback by a press conference where human settlements minister Mmamoloko Kubayi citing statistics that did not actually support her point, had a go at banks, accusing them of discriminating against black clients for home lending.

“This is another misguided attack on the banks from a senior politician after minister in the presidency, Khumbudzo Ntshavheni, accused banks last year of being ‘traitors’ over allegations of currency manipulation.”

The case she was referring to, which was about certain traders trying to profit from manipulating the rand, was largely thrown out by the Competition Appeal Court months later over a lack of evidence.

Mavuso says this pattern of attacks against banks by ministers, unsupported by evidence, is damaging to government’s relationship with business.

“It is fine to criticise businesses that do wrong, but it must be backed up by facts and avoid inflammatory language designed to cause public outcry. Government must realise it has a responsibility to support the health of the business environment which, especially in the case of banks, includes a responsibility not to whip up public sentiment, particularly when there are no facts to support it.”

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Operation Vulindlela can help with local government

She says a critical factor for the success of government’s partnership with business has been Operation Vulindlela (OV), a delivery unit set up between the presidency and National Treasury to get key reforms implemented.

“The OV unit has flagged the performance of local government as an area that should get its attention in future. Last week, a report from the Auditor General added evidence on how important this should be. The report revealed a sad reversal in the performance of municipalities’ audits. Only 34 of South Africa’s 257 municipalities received clean audits, down from 38 last year and 41 the year before.“

She points out that the only province which improved was the Western Cape (which increased the number of clean audits by two) and Cape Town is the only metro to get a clean audit. However, on the positive side, there was a decline in the number of municipalities that received disclaimers with findings, the worst audit category, from 22 to 12.

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Let’s see what Operation Vulindlela can do to improve local governance

“The performance adds more impetus to the role that OV could play in getting local governance performance to improve. Audits reflect the overall quality of management of a municipality. You can be sure that if the numbers are not being looked after, service delivery will also be suffering.

“We are looking forward to seeing what OV can aim to achieve in this area and how business can help. The momentum we see at the national level through the government of national unity needs to trickle down to the local level.”

Mavuso says perhaps OV can help facilitate that by creating channels for invigorated national departments to support local government via the provinces. “Coordinated action between the tiers of government has always been very difficult to achieve, but our changed political dynamics, as well as local government elections only two years away, may create the opportunity to get this right.”