Frontline Africa Advisory

THERE IS A NEED FOR A MORE CONSTRUCTIVE ENGAGEMENT BETWEEN GOVERNMENT AND BUSINESS

THERE IS A NEED FOR A MORE CONSTRUCTIVE ENGAGEMENT BETWEEN GOVERNMENT AND BUSINESS

When President Cyril Ramaphosa presented his Economic Recovery and Reconstruction Plan in Parliament in October, he stated that the plan was the outcome of discussions among the social partners at the National Economic Development and Labour Council (Nedlac). He also stated that the plan would be overseen by a Presidential Working Committee (PWC), chaired by himself on behalf of government, and will also consist of leaders from businesses, labour, and civil society. The Committee will meet monthly to make sure that the structure is not reduced to another talk shop.

This may signal a more sustained engagement between government and business on finding adequate solutions to the country’s socio-economic ills. For some time, business and labour have bemoaned being side-lined in the development of economic strategies and yet being expected to be at the forefront of implementing such strategies. Especially grating for both sectors has been the top-down approach in which government has foisted regulatory interventions without sufficient explanatory basis or rationale for chosen actions.

The levels of poverty, unemployment, and inequality facing the country require a stronger partnership between government and business. As the main engine of economic growth and job creation, business has always called on government to lighten the regulatory burden and undertake necessary reforms to improve the country’s competitiveness. More crucially, business and labour have insisted that government cannot work alone in devising the necessary strategies if these are to achieve the desired impact.

There is no better example of the consequences of government unilateralism than the unhappiness generated by lockdown regulations. The development of lockdown regulations was characterised by disregard for the country’s economic interests and utter contempt for business concerns about the impact of sustained lockdowns on business viability. Government took a zero- sum approach of saving lives with little consultation or regard for safeguarding economic activity.  Perhaps because of the sheer speed of the spread of the virus and its unknown nature, government deemed engagement with business as unnecessary irritant in the fight to save lives, forgetting that saving livelihoods was just as important a consideration.

In part, this stance owes to the African National Congress (ANC) government’s inherent deep mistrust of business as a segment of global capital that does not share the deepest aspirations of South Africans. There is a strong view within the ANC that, in its dealings locally, business takes a cue from global capital and almost invariably adopts an antagonistic posture towards government and the transformation agenda. This ‘ideological’ posture has served to generate tensions between government and business over the most appropriate forms of government intervention in the economy.

At times, big business has also been guilty of being more inward-looking. The over-emphasis of financial losses during Covi-19 made it come across as if it were less interested in saving lives. Litigation by some businesses challenging the lockdown regulations only served to harden government’s attitude and gave credence to the argument that big business was only concerned about profits.

South Africa is at a critical stage where a common minimum programme between government and business, in the main, has been agreed to and implemented.

The future of South Africa is contingent, ultimately, not on the extent of contestation between the government and business, but on meaningful partnerships between the two, as well as with other social partners.

Government must appreciate the potential risks of developing and implementing economic policies that do not adequately involve business’ input. Equally, business should understand that the narrow pursuit of economic policies that are blind to the country’s socio-economic imperatives is bound to produce seeds of destruction. Thus, crafting a better life for all requires that government and business engage more meaningfully to produce a win-win situation.

Written by Atlehang Molefe

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