Key meeting delayed despite urgency of crisis
● Amid a chorus of calls for the government to get cracking on economic recovery, President Cyril Ramaphosa has postponed a meeting of the presidential working committee (PWC) that was meant to agree a way forward that all would support.
The committee, which was set up last year, brings together the senior leadership of the business, labour, government and community constituencies at the National Economic Development & Labour Council (Nedlac) to unblock constraints to job creation and growth.
It had been due to meet tomorrow. But the meeting was postponed on Thursday, prompting surprise and disappointment.
Nedlac executive director Lisa Seftel said the president had postponed Monday’s meeting so he could have engagements with social partners.
She said, however, that all parties at Nedlac supported a document that built on the jobs summit agreement of 2018 but had been revised and expanded in light of the economic crisis caused by the Covid lockdown and the downgrade of SA’s credit rating.
“There is an emerging consensus on what needs to be done,” she said.
The document includes input from Business for SA’s (B4SA) accelerated economic recovery strategy, which proposed a set of priority actions to kickstart investment, growth and job creation and emphasised the need for immediate action to arrest SA’s catastrophic economic slide.
Business Unity SA vice-president Martin Kingston, who led the B4SA process, said: “We hope the PWC meeting will be reinstated as a matter of urgency as we believe it is a critical step in driving an integrated and expedited approach to the economic recovery, which can only be achieved with the full involvement of all social partners.”
Cosatu’s Matthew Parks accused the government of dragging its feet, saying there was already consensus on a set of priority measures that needed action, and that this was not the first postponement.
“We are extremely unhappy about it. We received notification yesterday that the president wanted to consult social partners first but we have not had a PWC meeting for the past five months.
“This is a structure that was meant to meet monthly — we gave the president time in the first two months of the lockdown to address the health issues but we now need to focus on the economic recovery.”
A new report on SA released on Friday by the Paris-based Organisation for Economic Co-operation and Development (OECD) urged the government to support the economic recovery in the short term while undertaking reforms to increase potential longterm growth.
“Regulatory restrictions are still relatively high … Reform must include reducing the high level of government involvement in the economy,” said Falila Fall of the economics department at the OECD, which sees the local economy contracting 7.5%-8.2% this year.
“This is a good time to open SA to competition; it is a good time to reduce bureaucracy,” said Álvaro Pereira, director of country studies at the OECD economics department.
SA urgently needed to restore fiscal sustainability and this would require curbing growth in the public-sector wage bill, which accounts for 12% of GDP, and reforming state-owned enterprises (SOEs), whose contingent liabilities on the state’s balance sheet account for 20% of GDP, the OECD report said.
Addressing an OECD webinar, Treasury director-general Dondo Mogajane said fiscal sustainability was paramount, and that SOEs needed to be properly managed and able to raise their own capital. “It is important on the one hand that we support those that need to expand and remain critical to the economy but close down those that have not delivered,” Mogajane said.
We are extremely unhappy about it. We now need to focus on the economic recovery Matthew Parks
Cosatu spokesperson