We must act urgently if president to be proved right on recovery

Covid-19 has aggravated SA’s economic and social position, which was in a precarious state even before the pandemic. SA has fallen behind its African and global competitors as the country has inadequately addressed its primary challenges of inequality, poverty and unemployment. There is now, more than ever, an urgent need to develop protocols and mechanisms to allow it to operate under the difficult conditions that are expected to persist for some time to come. This will certainly not be easy. A Business for SA (B4SA) road map clearly sets out recommendations towards which business and government can work alongside our other social partners to reset the country’s economic and social development. We are in full agreement with President Cyril Ramaphosa, who wrote in his weekly newsletter this week that SA has all the ingredients to recover from the economic damage caused by Covid-19. But SA’s recovery simply cannot wait another few weeks or months. We support government’s view that we have to start immediately. Taking immediate and decisive action now will allow the country to return to growth, deliver material employment gains, reduce inequality and create a better quality of life for all our citizens.

The national response to Covid-19 has highlighted the opportunity to harness the goodwill of all groups in society which, when combined with the skills and financial resources of the business community, can help reset the country’s economic and social path. The president references this in his newsletter, writing: “Working with our social partners we must speed up the pace of implementation so we can rebuild the base of our economy.”

Forging this social and economic compact will take time — a commodity SA no longer has. Immediate, rational and pragmatic choices must guide our actions. As a nation, we must acknowledge our constraints — we have limited access to both financial and human capital and must compete with other countries also struggling with the impact of Covid-19. We must therefore ruthlessly prioritise and deploy resources to secure the greatest impact in the shortest possible time.

Improving execution is critical and must be addressed immediately.

The choices will require difficult trade-offs by all stakeholders — important initiatives in some areas will need to be deferred or scaled back. However, these difficult choices must be made now to kickstart the design and implementation of the steps to accelerate economic transformation while the social and economic compact is still being formed. Priority must be given to an accelerated and sustained economic recovery to create new jobs and strengthen the fiscus.

Growth will require both domestic and international investment, which will only be value-creating and job-rich if it is sustained. Substantial capital must be sourced internationally, where SA competes with other emerging markets in its bid to be a globally attractive investment destination. Although significant progress is possible over a relatively short time, employment opportunities will initially grow at a slow pace as small, medium and micro enterprises, the primary source of new jobs, will take time to recover. Additional interventions are needed to offset the job losses which had already taken hold before lockdown. These steps require a wide-ranging partnership between the private sector and government.

We are delighted by the president’s recent announcement that an economic recovery programme will be finalised in the coming weeks. We believe the most important component of that programme must be protecting and creating jobs. We can establish a new narrative about SA at a macroeconomic level — but only if we present a clearly articulated economic recovery strategy, which is efficiently implemented and led with visible urgency. We stand ready to substantively engage the government in the detail of the B4SA Economic Recovery Strategy, which we have already presented to the president.

Business is ready to work side by side with the government

Kingston is chair of the Business for South Africa steering committee