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ANC warned: Businesses will abandon key partnerships if they choose populist coalition

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ANC warned: Businesses will abandon key partnerships if they choose populist coalition

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  • BLSA chief executive Busisiwe Mavuso warned that the business sector would withdraw from successful engagement with government if the new governing coalition included partners that pushed for nationalisation and new taxes.
  • More than 130 CEOs are currently working to address crises in electricity, logistics and crime.
  • Mavuso heavily criticised President Cyril Ramaphosa for signing the NHI Bill before the election.
  • For more financial news, visit News24 Business Front Page.

If the new governing coalition includes partners that push for nationalization and new taxes, the business sector will withdraw from its successful partnership with the government.

Amid speculation about an ANC-EFF alliance, Business Leaders Association of South Africa (BLSA) chief executive Busisiwe Mavuso told News24: “We will not support a government that promotes policies of massive economic destruction.”

The Economic Freedom Fighters’ manifesto includes policies to nationalize mines, banks, construction companies, and the Reserve Bank, as well as proposals for new taxes on the wealthy and corporations.

Last year, more than 130 CEOs of South Africa’s largest companies pledged their support for a business-led initiative to assist the government in addressing the country’s energy, logistics and security issues.

Mavuso said top CEOs – including Sibanye’s Neal Froneman and Remgro’s Jannie Durand – were sponsoring different work streams with great success.

These include progress on liberalising the electricity sector, raising R100 million from the private sector to help solve the energy crisis, and urging the government to pass the Electricity Regulation Act.

Mavuso said that South Africa has broken the record of 60 days of unlimited power supply, and Eskom’s achievement is inseparable from the strong support of enterprises and the skills training of technicians at problematic power stations.

She told News24:

The new administration may actually try to reverse some of these gains. It would be a shame if our work stopped because there is still a lot more we need to do.

The business also played an important role in developing the freight and logistics roadmap and Transnet’s turnaround plan.

It also assists the National Prosecuting Authority (NPA) Investigation Directorate and the Falcons in building law enforcement capacity and allocating skills to these organisations, which Mavuso said is essential to getting South Africa off the grey list by January 2025.

Last week, Ramaphosa signed the much-anticipated National Anti-Corruption Law Amendment Bill, which seeks to establish an anti-corruption agency similar to the former Scorpions. Mavuso said it was a great milestone for the BLSA, which had been pushing for the bill to be signed.

She acknowledged that businesses have received a lot of criticism for supporting the ANC-led government.

“This has absolutely nothing to do with the ANC. It is much bigger than the ANC. It reaches about 62 million South Africans,” she said.

“We hope to continue to work with this seventh government. Business is fully committed to providing all the necessary support, resources, skills, expertise and knowledge to get our economy out of this difficult situation.”

But if the new government is not committed to pursuing a “reform agenda” and does not provide South Africa with the right policies to boost business confidence and attract investment to grow the economy, businesses will leave.

Alliance corruption

Mavuso also fears the new coalition could introduce large-scale corruption across the country.

With the ANC unlikely to secure an outright majority in this week’s election, a fierce, historic deal-making is expected to forge a governing coalition both nationally and provincially.

Mavuso told News24 that coalitions have their benefits. Coalitions represent a range of social interests. “It’s not just one party thinking about the issues. You benefit a lot if you have others present, which will improve the quality of public policy and maybe even the quality of life.”

But effective coalitions require politicians to be single-mindedly focused on the national interest and willing to compromise for the greater socio-economic good.

Mavuso said South Africa has been lacking such a system and coalition politics has been disastrous so far. She stressed that the system is “everyone for themselves” and has led to leadership chaos, with the city of Johannesburg changing eight mayors in the past two years.

Mavuso added that chaotic alliances among South Africa’s municipalities undermine effective decision-making and prevent the delivery of even basic services. “If the right alliances are not formed, this dysfunction could become the norm across the country.”

Businesses are particularly concerned that coalition talks could unleash a new round of state corruption as parties trade favors to secure power.

“Politicians should know that this is about South Africa and its people, not their narrow, selfish party agendas.”

She also fears that coalition negotiations will lead to bargaining for cabinet posts, leaving South Africa’s cabinet lacking the key skills needed to fill their positions.

“Because that’s where corruption starts. If you don’t put the right people in positions of power, then how can you expect the department or ministry they lead to function properly?”

Mavuso said the new government’s “real goal” should be to boost economic growth, with annual GDP growth averaging just 0.8 percent since 2012.

“This low-growth trap will actually lead to the decline of the South African economy.”

More harm than good

Mavuso said proper growth was the only way to address youth unemployment, which she saw as the biggest crisis facing South Africa. “If we don’t address this, we will really see the economy collapse and the tragedy of July 2021 will repeat itself.”

“What we need is responsive economic and fiscal policies, regulatory certainty, an effective and efficient network industry, a capable state and effective public services – especially at the local level, because that is where the key is.

“But I can tell you right now, you know, the NHI in its current form is not a responsive economic policy.”

Last week, Ramaphosa signed the new bill, but businesses and many healthcare professionals say it effectively ignores all their input in recent years.

Mavuso described the move as a desperate attempt to win over voters, who Gauteng Premier Paniaza Lesufi has promised will have free access to private specialist health care after the election.

Read | Busisiwe Mavuso | Unviable NHI seriously threatens South Africa’s chances of becoming a regional business hub

“This is wrong information and the reason why it is worrying is because voters expect you to deliver on your promises after the election,” Mavuso said.

The reality is that the NHI may not be implemented for a decade because funding is not yet clear. The government estimates that R200 billion will need to be invested in the public health system before the NHI can be implemented.

Mavuso said business supported the NHI but not in the form of a law signed by Ramaphosa that excludes private healthcare management.

“We have repeatedly stressed that this plan is unfeasible, unfinanceable and unimplementable. It will do far more harm than good.”

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