Sona: where is the red tape unit to make it easier to do business? – BLSA

In this year’s Sona president Cyril Ramaphosa did not mention his red tape unit which has dropped off the radar, although it was established years ago with the intention of smoothing the operating experience of businesses.

In his Sona two years ago, he prominently said that it was set to “improve the business environment for companies of all sizes”. This year however, he did not give any indication that government will do something to improve the business environment in the country.

Business Leadership SA CEO, Busi Mavuso, says she believes people do not properly appreciate how hard it is to run a business in South Africa.

“Electricity disruptions are the most obvious challenge for small and big companies, but there are so many other obstacles, from navigating employment regulations to getting suppliers, including government, to pay you promptly.

“And if you rely on trading goods across borders and are therefore at the mercy of the logistics system, business has become considerably harder over the last year.”

She points out that improving the business environment was a priority for the president in his Sona five years ago.

“Back then, he pledged to reduce the regulatory barriers for small business and work with social partners to build an ecosystem that supports and nourishes entrepreneurs. But at last week’s Sona, there was very little on the importance of improving the business environment. It has sadly disappeared from the agenda.”

Mavuso says while some regulatory reforms have eased the burden on business, particularly the ability to install solar electricity with tax incentives and for larger companies to build their own generating capacity, it has, overall, been getting harder to run companies.

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New visas only available in a few months – not good enough

“It has become harder to find skilled people thanks to the weak performance of the education system and the loss of skills overseas. On the day of the speech, new draft regulations were published on scarce skills visa regulations and a proposed digital nomad visa scheme. These are welcome, but they are still months away from coming into force, despite a new visa regime having been a priority for years.”

Meanwhile, she says, any business trying to hire skilled foreigners faces many months of delays with backlogs of thousands of applications sitting at the Department of Home Affairs that are simply accumulating.

“You can just imagine what it does to your business when a critical person required for a new production line or engineering project simply cannot arrive for work because of delays in getting a visa processed.”

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More police will not solve crime and corruption

She also points out that crime and corruption are worsening challenges for business, with construction mafias and business forums extorting businesses across the country.

“These are a serious cancer spreading through the business environment that requires concerted attention between business and government.”

Tackling crime and corruption is a key workstream in the partnership between business and government to deal with our most urgent challenges, she says.

“While the president positioned tackling crime and security as a key priority, the focus was on boosting the numbers in the ranks of the police but what we urgently need is a substantial improvement in the performance of crime intelligence, investigations and ultimately prosecutions.”

Business has taken a very pragmatic approach to dealing with the challenges to the business environment, Mavuso says.

“We have pulled together resources to support various interventions in partnership with government, from focused efforts to improve the performance of key rail lines to fixing Eskom’s plants. We will work with those who want to work with us to deliver change.”

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President has no support in government to cut red tape

She believes that the president finds it hard to do anything that will make a real impact because many members of his government do not in fact want to deliver the necessary changes to cut the red tape. “Whether out of ideological resistance or vested interests in the status quo, resistance to implementing the necessary reforms is a problem all over government.”

The presidency’s Operation Vulindlela is an effective intervention to push forward reforms and make sure they actually happen, but the president’s speech is often strong on imagination and stagnation when it comes to translating vision into reality, she says.

“Ultimately, the president needs a cabinet that shares his reform vision and is committed to its swift implementation. When reforms hit delays, it is often simply because decisions are not made and bureaucratic processes are not pushed forward. There can be many reasons for that, but a lack of political will at the top of departments often seems to play a role.”

Mavuso says if we want to deal with our many problems, we must focus on improving the business environment, as it is key to enabling the establishment and growth of companies.

“Growing companies create employment and taxable revenue that can drive real change across the country.”