Now Cyril must put SA first, says BLSA’s Busisiwe Mavuso
Poll should have freed Ramaphosa from populist pandering
● President Cyril Ramaphosa must deliver on his election promises without delay, says Busisiwe Mavuso, chief operating officer of Business Leadership SA, which represents more than 70 of the country’s largest companies.
“The country needs to realise this is our last chance. If he fails to make the right decisions now, we’re going to be another failed African state.”
He promised to prioritise economic growth, fix Eskom and other state-owned enterprises, fix government institutions and reduce his cabinet and the civil service.
“In effect he was acknowledging that we’re on the precipice.”
He has no excuse now not to get cracking, says Mavuso, who is also on the board of Business Unity SA.
“The reprieve that has been given to Ramaphosa up to now was because people thought maybe he doesn’t have a mandate yet and that’s why he can’t take the bold steps necessary.
“He is no longer going to have that excuse. The stay of execution we’ve had by ratings agencies and foreign direct investors is going to be no more.”
The first test of how serious he is will be the cabinet.
Reducing its size is a given, but he must also appoint ministers who know what they’re doing.
“This ANC government has been anti for the longest time .”
This has been disastrous for the country. “SA is not a poor country. We are poor by choice because of the decisions we have made. One of those decisions has been to rob ourselves of people in the cabinet who know what they’re doing.”
With a fit-for-purpose cabinet in place, Ramaphosa must tackle Eskom without delay.
“Business sees Eskom as the greatest, most immediate crisis facing SA.”
Until this is fixed, everything else is a nonstarter, she says.
The panic when the China Development Bank couldn’t release the R7bn drawdown on the loan facility Eskom was requesting was the starkest illustration yet of how close SA is to the edge with Eskom.
“We saw how quickly [finance minister] Tito Mboweni had to make that money available. He had no choice. He knows that if Eskom defaults it’s going to be a huge trigger event.”
She says there’s talk that the Chinese may withhold a second urgently needed drawdown.
“The reason the China Development Bank is worried is because they’re saying they don’t know who’s responsible for what and who has ultimate accountability given that there’s a presidential task team, a technical review team, the team of [chair] Jabu Mabuza in the ministerial committee, the chief reorganisation officer of Mboweni, and the board.”
Business wants to see a more “structured and deliberate” approach.
“Serious staff cuts need to happen now. That should be a foregone conclusion,” says Mavuso.
The right people need to be appointed to state-owned enterprises.
“Cadre deployment can no longer be an option. If we want to change things in this country it would be the definition of madness to continue doing what we’ve always done. We have to do things totally different, and this means in the best interests of SA Inc.”
Business supports Mboweni’s view that SAA must go and there needs to be a serious rethink about the future of other SOEs.
“We’re going to have to rethink our romanticised idea of owning all these state companies and decide which of them are strategic to the country.”
If SAA is not providing a public service the private sector cannot provide, “then abandon it, get rid of the damn thing. It’s a huge albatross around our neck.”
The decisions business expects from Ramaphosa may be unpopular within the ANC and ruling alliance, but that is no excuse for him not to make them, she says.
“He needs to be called out specifically because if he can’t make these decisions as president of the ANC then he’s going to have to make them as the president of this country. He needs to put SA first.”
If, after receiving a mandate in the elections, he still feels obliged to make populist decisions, “then we are in bigger trouble than we realise. What ought to be driving our decisions as a country must be bigger than populism.”
Ramaphosa should not be entertaining populist noises about the independence of the Reserve Bank and the issue of prescribed assets.
“If we’re trying to position ourselves as an investment destination, then the mooted issue of changing the status and mandate of the Reserve Bank is really going to have to be nipped in the bud. In our view, the proposal to nationalise the Reserve Bank is more of a threat to investment than prescribed assets.”
The ANC election manifesto promised a move to prescribed assets, and the ANC’s head of economic transformation, Enoch Godongwana, recently called for this to be accelerated.
“We believe prescribed assets will be a huge disincentive to investment,” says Mavuso. “Asset managers cannot be dictated to in terms of where they invest our money.
“You don’t come into government and embark on industrial-scale looting and then come and say where are we going to get the money to fix SOEs, we’re going to take people’s pensions and investments. It doesn’t work that way.
“This crisis of the SOEs we’re sitting with is a legacy of the ANC, so they’re going to have to come up with a way of solving it, and prescribed assets is not the way.
“It’s a problem the ANC government intentionally and deliberately created, so they cannot now take people’s retirement money to fix it.”
Godongwana said last week banks must be obliged to invest in new coal mines.
Leave the banks alone, says Mavuso.
“The reason we were able to withstand the global financial crisis of 2008 was because we had this strong banking sector. We cannot start messing with the very few strong institutions we have in this country by dictating to them how to do what they know best how to do.
“I don’t think the ANC is in any position to be dictating to the banks or to anyone in business in terms of what they need to do.”
If the president fails to make the right decisions now, we’re going to be another failed African state Busisiwe Mavuso
Chief operating officer of Business Leadership SA