Business Day

Mavuso: why is doing business even harder?

- Linda Ensor Parliament­ary Correspond­ent

Doing business in SA is fraught with difficulti­es which are not made easier by the fact there is resistance in government to implementi­ng the necessary reforms, Business Leadership SA CEO Busi Mavuso says in her latest newsletter.

Improving the business environmen­t was critical for companies to grow and create jobs, but the difficulty for President Cyril Ramaphosa was that many in his government did not want to deliver the changes necessary, she said.

“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 [state of the nation] speech is often strong on imaginatio­n but then strong on stagnation when it comes to translatin­g vision into reality.

“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 aren’t being made and bureaucrat­ic processes are not being 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 said.

Doing business had become considerab­ly harder over the past year, she noted. Among the problems were electricit­y disruption­s, employment regulation­s, getting government to pay promptly, and a poorly performing logistics system.

Yet Ramaphosa’s state of the nation speech attached very little importance to improving the business environmen­t, which Mavuso said had “sadly” disappeare­d from the agenda.

This was in contrast to his speech five years earlier, which made improving the business environmen­t a priority. At the time, Ramaphosa pledged to reduce the regulatory barriers for small business and to work with social partners to build an ecosystem that supports and nourishes entreprene­urs.

“We’ve seen little from the president’s red tape unit. Even though it was establishe­d years

ago with the intention of smoothing the experience of businesses, it did not get a mention in the speech, even though two years ago the president prominentl­y said the unit was set to ‘improve the business environmen­t for companies of all sizes’.

“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. Skills have been harder to find, thanks to the weak performanc­e of the education system and the loss of skills overseas,” Mavuso wrote.

Because of visa difficulti­es, businesses that tried to hire skilled foreigners faced many months of delays. “There are backlogs of thousands of applicatio­ns sitting at the department of home affairs that are simply accumulati­ng,” she said.

She also highlighte­d crime and corruption as another worsening challenge 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.”

A substantia­l improvemen­t in the performanc­e of crime intelligen­ce, investigat­ions and prosecutio­ns was urgently needed, whereas Ramaphosa, while highlighti­ng crime and security as a key priority, only focused on boosting police numbers.

Crime is one of the work streams, along with energy supply and logistics, in which business is working with the government.

 ?? ?? Busi Mavuso
Busi Mavuso

Newspapers in English

Newspapers from South Africa