Consumer Good Council warns Ramaphosa of tough economic times to come

An open letter to President Cyril Ramaphosa from the chief executives of member companies of the Consumer Goods Council of South Africa (CGCSA) has warned of “much higher prices for consumers, who are already under severe financial strain”.

“The consumer goods industry’s contribution to [gross domestic product] is significant and is also the country’s largest employer. Millions of people depend on us for their livelihoods,” the CGCSA said.

“We are alarmed and dismayed by the levels of load shedding which we have all had to endure over the past decade and which have escalated catastrophically in recent months.

“While we have maintained our operations and supply chains so far by using emergency power generators, this has been at an unsustainable financial cost.”

READ MORE: Load shedding threatening food security in SA

Deterioration of infrastructure

The letter noted the deterioration of other essential infrastructure – including water, roads, rail, and policing – “all make our tasks, and those of thousands of other businesses around the country, even more difficult”.

“If this crisis continues, we will not be able to guarantee stable supplies of food, medicines and other essential goods,” said the letter signed by co-chairs Gareth Ackerman, Johan Voster and CEO Zinhle Tykiwe. “We require urgent and decisive action from government to solve the crisis.”

These steps must include:

-Rapid implementation of the plans already in place to solve the overall energy crisis

-The removal of regulatory red tape and escalating indirect taxes such as the health promotion levy to enable investment and business sustainability

-Address the deterioration of essential infrastructure such as water, roads, rail and policing

-A suspension of the fuel duty levy and road accident fund for the consumer goods businesses and value chain, for as long as there is regular load shedding.

READ MORE: Money to burn: ‘Diesel could end or lower load shedding by two stages’ – De Ruyter

‘Critical’ sector

This is a critical sector that should be considered for fuel rebates similar to the mining, agriculture, fisheries and forestry sectors; Effective tax and other incentives to install localised renewable energy at small and medium scale, action to ensure that critical infrastructure, such as essential food production, medicines and distribution facilities are not only exempted from load shedding but are prioritised on the safety and security list, and accelerate the fight against illicit trade across the economy as it reduces the tax base and deprives government of crucial revenue at this critical time.