Action now to seal ratings deal
We must all contribute if we are to prevent a downgrade in December
SOUTH Africa dodged a bullet last week when S&P Global Ratings decided not to downgrade us. Fitch followed suit this week and maintained our investment-grade status.
Congratulations are in order for Team South Africa for all the efforts made to stave off a cut in our rating.
A downgrade can be detrimental — especially if you see how long it sometimes takes for countries to recover their investment-grade status once it has been lost.
We have until December to turn things around and restore confidence in our economy.
S&P highlighted the need to focus on political stability, fiscal discipline, energy and labour reform, among others.
This is helpful, clarifying as it does the priority areas that will have the biggest bearing on the decision in December.
What we do not need now are more strategies and discussion on this matter. It does not take a rocket scientist to figure out what the solutions need to be — and hopefully there has been enough thinking and planning invested into that already. What we need now is a clear focus on execution.
The need for our leaders to ensure that plans are carried out is more important now than ever before.
Executing plans effectively can be challenging, especially in an emerging market such as our own, where there are added layers of complexity.
Implementing plans successfully is a challenge regardless of whether the institutions or people involved are in the private or public sector. Imagine how complicated it is at national level, where collaboration is required across the board.
For Team South Africa to win in the next six months, they have to go back to the fundamentals of effective execution.
This means identifying the few, clear, high-impact actions that will have the biggest positive effect on the economy. By actions, I mean actual tangible activities — not committees, forums and investigations.
These actions need to come with clear lines of accountability. If we do not clarify the lines of accountability and provide the necessary daily capacity those responsible need if they are to deliver those actions, we will all wonder, six months from now, why no progress has been made.
As an example, we have a ninepoint plan that our leaders promised to deliver on earlier this year. Given that it is unrealistic to address everything at once, we have to pick the few relevant actions that will have the biggest impact. On top of that, we must clarify who is accountable for delivering on those actions.
These clear actions need to be communicated to the nation for buy-in and ownership because, after all, this should be a collective effort. We all stand to lose if these actions are not successful. When the news of S&P’s decision came out last week, many people hailed Finance Minister Pravin Gordhan — and rightly so. But we have a whole nation of individuals and leaders who should be playing an active role in the solution. Especially after news this week by Stats SA that our GDP contracted by 1.2% in the first quarter of this year.
We need everyone to take actions — big or small — that will make a difference.
In December, I hope we will be saying: “Congratulations to the nation for collectively working together towards maintaining our economy’s investment-grade status.”
As an example, look at what the nation is able to achieve on Mandela Day each year. Individuals and organisations nationally and globally dedicate 67 minutes towards doing HANDY FINGERS: Women knit and crochet blankets for Mandela Day GREEN: Volunteers give back 67 minutes by starting a garden at a Soweto school their part to change the world. They are all contributing — on no matter how small a scale — to the development of their nations. They don’t wait for directions or rewards from our leaders. That is how we should be thinking about the collective effort needed to revive the economy.
Another example could be at corporate level. One of the biggest opportunities within our economy is supporting the growth of our small to medium enterprises so that they can create much-needed jobs in South Africa. TINY HANDS: Children make their contribution by clearing litter from a Cape Town beach
We need everyone to take actions that will make a difference
To this end, our corporations should be doing more than just what is mandatory in order to support small businesses. They should be taking simple actions that will contribute to the growth of small businesses.
Ninety CEOs from the private sector have committed to developing a fund to address this issue. I hope that in six months this fund will exist — and not still be in its “discussion” phase.
Our nation has a lot of potential, and there is a reason why, even now, it remains one of the strongest economies on the continent.
However, the next couple of months should be about nothing else but rolling up our sleeves and taking simple actions that will make the most difference.
Not strategies, committees, discussions. Actions.
Sikhakhane is an international speaker, writer and strategist, with an honours degree in business science from the University of Cape Town and an MBA from Stanford University. She also advises small businesses