SA investors should support Ramaphosa’s new plans

IT IS time for local business to support President Cyril Ramaphosa’s change agenda and invest in the economy, says the head of the University of Cape Town’s Graduate School of Business, Professor Mills Soko.

“South Africa is the most developed economy in Africa. There are lots of opportunities and lots of investors who are sitting on a cash pile,” he says.

Ramaphosa has appointed a highlevel team of “special investment envoys” to bring in $100-billion (about R1.2-trillion) of foreign investment, but domestic business needs to lead the way, says Soko.

“They must demonstrate they are committed to South Africa and they must invest. That will lead to international investors replicating what domestic investors are doing.”

He says Ramaphosa has done enough to demonstrate he is serious about change, and the business sector must now support him.

“The business sector can’t keep waiting, they’ve got to support him now. They’ve got to show that they believe in him.”

The country cannot afford for business to wait on the sidelines any longer, he says. “We are truly in the doldrums. Jacob Zuma destroyed this country in a way that we don’t even understand.”

Ramaphosa is trying to fix it, but he needs swift and massive support.

“Business needs to help him now,” says Soko. “Not next year.”

It needs to send a message that “we see what you’re doing, it’s significant, it’s not perfect, but we support you”.

If it doesn’t do this it will play into the hands of the anti-business lobby and reinforce the populist message that business is the enemy of economic transformation.

He agrees that the government’s support for expropriation without compensation on top of the “rhetoric” about white monopoly capital and radical economic transformation is doing nothing to fix the substantial “trust deficit” between business and government, which he says is responsible for the lack of domestic investment.

But business needs to see where Ramaphosa is coming from.

“Right now it’s about self-preservation; it’s about winning the 2019 election; feeling threatened by the EFF; feeling vulnerable.”

He says business leaders he has spoken to accept the need for radical change, but they need more detail.

“If the government says expropriation without compensation, to what end? Where is that going? They don’t know. There are no details. They understand the need for land reform and so on, but they want specifics.

“This empty rhetoric doesn’t help us.”

The government needs to spell out how expropriation without compensation will feed into the National Development Plan and contribute to the overall national development objectives of the country.

“What is their priority? Is it land expropriation or creating jobs? Young people living in rural areas want to live in urban areas. They are not interested in farming or land; they want jobs. So what is expropriation without compensation going to do for them? How is it going to bring them jobs?”

Business supports land reform, but expropriation without compensation will not achieve it, he says.

He refers to a government study showing that nine out of 10 farms that were parcelled out to emerging farmers failed.

“That’s because it’s one thing to give land to people, but if you don’t give them adequate support and advice and so on, it’s not going to work.”

As important as land reform is, the priority is jobs, he says.

“Our most important priority is job creation, and business can do that.” —