A poor investment climate, policy uncertainty, Eskom’s unstable power supply and overregulation are among challenges confronting the National Economic Development and Labour Council (Nedlac) as it attempts to achieve social stability in the country.
Organised business believes these conditions among others point to “a country in crisis”. This is the view of Nedlac’s business component, which stated that while Nedlac does a splendid job of bringing social partners together to tackle huge societal problems, the council functions under very trying conditions.
Business Unity South Africa chief executive Cas Coovadia, who represents organised business at the council, said South Africa presents a poor investment climate for both domestic and foreign investors – and the supply of electricity is unstable.
However, business was cooperating with the presidency to ensure President Cyril Ramaphosa’s energy plan was implemented urgently. Coovadia told the recent Nedlac annual summit that poor water infrastructure affected businesses operations and communities.
The sector was also alarmed by the social instability accompanied by xenophobia involving Operation Dudula that has gone unchecked.
The other concern was weak law enforcement and rampant crime, particularly the scourge of criminals holding business sectors hostage with relative impunity.
Coovadia cited the examples of the torching of InterCape and Golden Arrows buses, the construction mafia who hijack building firms and extort money from them, as well as endemic corruption as revealed in the Commission of Inquiry into State Capture.
But most importantly, the flight of skills and capital resulted in a brain drain as skilled people left for greener pastures.
“Business has identified these as priority interventions we will work on with stakeholders, bilaterally and multilaterally, with a view to implementation.”
Coovadia touched on the controversial overregulation by the state and complex transformation rules and regulations the financial sector had to comply with that are enforced by the Financial Sector Conduct Authority.
Similarly, black economic empowerment targets have different enforcement mechanisms under the employment equity legislation.
Greylisting by the Financial Action Task Force (FATF), which blacklists countries that fail to cooperate in the global fight against money laundering and terrorist financing, could lead to a tough economic climate.
South Africa has been threatened with being put on the FATF greylist unless it deals with allegations of money laundering.
According to Coovadia, greylisting could result in an increased cost of doing business in the form of high interest rates; difficult international transactions for imports and exports, among others.
It could worsen an already high unemployment situation and SA would become a poor investment destination.
“All social partners need to recognise that these conditions point to our country being in crisis,” Coovadia said. All the social partners had good words to say about Nedlac’s role in society.
Bheki Ntshalintshali, who is overall convenor of labour at Nedlac, was critical of government policy implementation and lack of consultation. “Our approach must shift from an adversarial way to one which is solution orientated,” he said.
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-ericn@citizen.co.za
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