South Africa’s New Government Should Demonstrate Purposeful Leadership And Boldness To Grow The Economy

30 June 2024

The Consumer Goods Council of South Africa (CGCSA) says the announcement of a new cabinet by President Cyril Ramaphosa marks the start of a new, uncharted era for South Africa which at 30 years of democracy is at a crossroads, confronted by structural economic and social challenges, among them a low growth cycle, infrastructural inefficiencies, unreliable energy supplies, high unemployment, inequality and poverty. The new government has the formidable task of getting the country going, and in particular usher a new chapter in its relationship and engagement with the business sector, a key social partner in the wider national objective of achieving inclusive economic growth and prosperity for all South Africans.

While the challenges facing the country are immense, they are not insurmountable. They require bold, decisive leadership, with a purpose-led and solutions-based approach to resolving the impediments delaying or slowing down efforts to grow the economy. We expect that national interests will prevail over any differences, because South Africa no longer has the luxury of time to keep debating ideological difference or what is wrong with the economy or what needs to be done to address these issues. We need Action!!

The challenges facing the country need all hands on deck through partnerships with the business sector, civil society, labour movements, communities and other key stakeholders, to achieve economic growth, business sustainability, job opportunities and community self- sufficiency, meaning, our communities need to be empowered and liberated through access to basic services. The business sector also needs to be empowered through reforms to tax laws to unlock effective public-private partnerships that will enable rebates in the event that the sector spends money for example, to repair public infrastructure that is hindering service delivery and business continuity.

There are quick wins that the seventh administration has to address. Firstly, energy security is critical to ensuring that the economy functions as it should. Energy policy reforms implemented so far have already seen a significant increase in investment by the private sector in renewable energy, including growing appetite by foreign investors to participate in renewable energy projects in South Africa. Our members have been investing in alternative energy sources, and we expect the new government to continue providing a conducive framework that encourages further investment by not only our members, but by other sectors as well.

Secondly, infrastructure bottlenecks, particularly the port and rail network, be addressed through public and private sector partnerships. We are glad with the bailout of Transnet to strengthen its balance sheet and the opening up of the rail network to the private sector. This approach should also apply to address water challenges, which are already affecting companies and households owing to water shortages and outages due to poor water infrastructure which has neither been regularly maintained nor expanded to meet anticipated rising demand.

Thirdly, regulatory and policy uncertainty should be addressed as is the urgency to implement progressive policies that support growth and job creation and investment. To enable investment and business sustainability, CGCSA members have and continue to advocate for policy interventions that not only support their businesses but importantly, enable them to continue investing. The CGCSA has through the Red Tape Unit situated in the Presidency, been calling for the removal of regulatory red tape and escalating indirect taxes such as the health promotion levy, the subcontracting of government services to assignees, inspecting agricultural products on behalf of government and for profit.

Fourth, tackling crime is critical, because an unsafe society cannot thrive let alone feel safe. The country needs a decisive police force that is both proactive and effective in dealing with crime at all levels. CGCSA, through the Consumer Goods Crime Risk Initiative (CGCRI) is working closely with law enforcement and other stakeholders to fight the scourge of illicit and counterfeit trading. Fifth, service delivery at both national and provincial government level is vital; especially considering the deteriorating service delivery being experienced across municipal levels. Water quality and delivery, energy security, crime and infrastructure inefficiencies have worsened, and poor service delivery especially at local municipal and government levels not only affects the livelihoods of communities, but chases away investors and consequently, job opportunities and stifle SMME growth.

We therefore hope the government will work with our sector and the wider business community for the good of the country. The CGCSA is willing to continue to engage and collaborate with the government to provide and implement solutions to further improve the investment climate and support growth. CGCSA intends to invite relevant ministers and government officials to a series of engagements to discuss how government can effectively work together with captains of industry in the consumer goods sector. Our hope is that this time, there will be more willingness to listen to and engage on matters related to our sector in particular and the wider economy in general.