Presidency asks business to delay layoffs
The presidency has urged big business in SA to hold off on planned retrenchments, saying it is staying the course on the energy action plan as well as the logistics turnaround strategy. Measurable progress is expected in the near future.
“We have a plan. We need consistency which then will allow for stability and a clear way forward. We don’t need to chop and change. We need a consistent plan. Business has partnered with government and we urge business to stay the course,” said Rudi Dicks, head of the project management office in the presidency.
Eskom’s inability to keep the lights on and low productivity at Transnet rail networks and its ports is a major impediment to the country’s growth prospects.
This has led to lower GDP and a smaller tax intake, putting pressure on the government and business. Businesses such as ArcelorMittal and Sibanye-Still water have outlined plans to lay off thousands of workers in response to domestic issues and international factors.
Organised business agreed with the government last June to work together on energy, logistics and crime, the three areas business identified as critical to turning around the economy.
“If it is the prediction that economic activity is to decline further, what we have to do is convince the market that the plan [on logistics and energy] is credible and will be implemented quickly,” said Dicks.
On Sunday, public enterprises minister Pravin Gordhan expressed confidence in the leadership of Eskom and Transnet, saying they are “courageous to come forward” to rebuild institutions.
Gordhan was responding to criticism by leaders of smaller opposition parties in Business Day last week. They said loadshedding and the logistics backlog signalled strongly that little would change until the ANC government was ousted.
“The range of skills and expertise that currently constitutes the boards of Eskom, Transnet and Denel is commendable. These leaders embody integrity, professionalism, courage, patriotism and selflessness, and no amount of electioneering propaganda can change this. Furthermore, these leaders cannot be accused of doing any bidding for any party-political organisation,” he said.
Organised business has reiterated its confidence in the energy action plan and logistics roadmap.
“As business, we are fully committed to and participating actively in both the Energy Action Plan and the Freight Logistics Roadmap. We accept that these critical interventions may take longer than we require with an associated impact on the economy for all businesses and particularly small and mediumsized enterprises. Any retrenchments would be considered as a last resort as we are extremely mindful of the broader socioeconomic implications,” said Business for SA’s Martin Kingston.
Ahead of the 2024 general elections, Gordhan urged an end to “reckless and irresponsible politicking” that targets stateowned enterprises.
He addressed Action SA’s Herman Mashaba and Rise Mzanzi’s Songezo Zibi directly, saying: “It is no secret that 2024 is an election year, and we are going to see the likes of Zibi and Mashaba trying to use every trick to bamboozle the public and the voters through propaganda laced with outright fabrications, and distortions.”
COURAGE
Senior economist Iraj Abedien said if macroeconomic decisions, especially about Eskom and Transnet, had been taken at the right time SA could have been on a better economic trajectory by now.
“There is a lack of political courage to do things at the right time. We do this too late, when there is no other choice and that has been devastating to the economy.
“Unfortunately, with regard to President Cyril Ramaphosa, he knows the right thing but only does it when the damage has been done, and that has deepened the trust deficit during his administration.
“What is good for Ramaphosa going into an election year is that corruption is no longer glorified,” said Abedien.