Businesses threaten to dump government

South African business forums threatened not to cooperate with a new government if they were unwilling to create a business-friendly environment and continue the private partnerships established with the current administration. 

South Africans went to the polls on 29 May 2024. This year’s elections have been the most uncertain in democratic history, as the ANC will lose its majority for the first time since it took power.

Some of the parties that were up for election this year have expressed their intentions to nationalise parts of the country and introduce new taxes on businesses and the wealthy.

This has brought the sustainability of public-private partnerships within the government into question.

Private-public partnerships have existed for some time in South Africa, and establishing Business for South Africa (B4SA) was considered a milestone for collaboration between the two sectors.

B4SA was established during the COVID-19 pandemic as an “alliance of South African business leaders working with the government and other social partners to step up, lead and help create and deliver sustainable solutions for South Africa”.

Last year, President Cyril Ramaphosa met with B4SA business leaders “to discuss ongoing interventions and collaboration between the government and the business sector to achieve inclusive growth, inspire confidence in the economy and create jobs”.

The meeting ended with businesses agreeing to collaborate with the government to tackle problems undermining the economy and its growth potential.

Three of the country’s major problems were identified as top priorities: energy, transport and logistics, and crime and corruption.

Feedback from these workstreams over the past year has indicated that they have been relatively successful in achieving their goals.

In her latest newsletter, Business Leadership South Africa CEO Busi Mavuso said the current administration has made good progress in stabilising institutions and implementing economic reforms.

For example, she said Ramaphosa’s signing of the National Prosecuting Authority Amendment Bill is a key step in fighting corruption by strengthening the NPA. 

In addition, economic reforms led by Operation Vulindlela (OV) have aimed to address issues like load-shedding and logistics inefficiencies, which are critical for long-term economic growth.

“The key to the reform successes so far has been the partnership between government and the private sector,” she said. 

“Through B4SA, we have mobilised significant private sector resources and skills to support government in key interventions where expertise and outside resources are needed to implement long-lasting changes.” 

She said that looking ahead, the next administration should build on the momentum of these reforms.

“I hope the next administration embraces partnership and dedicates itself to continuing reforms and accelerating implementation,” she said. 

“Together, we can realise this country’s potential to create wealth and employment for its people, an aspiration that I know we all share.”

Mavuso told News24 that if a new ruling coalition includes parties that insist on nationalisation and new taxes, the business sector will withdraw from its partnership with the government.

“We are not going to support an administration that is touting policies of mass economic destruction,” she told News24.

B4SA chairperson Martin Kingston said he agrees with Mavuso in that it is crucial to ensure that the new administration formed in light of the 2024 elections is committed to continuing existing reform momentum.

He said the new cabinet must be as committed as the current administration to structural reform and the design of interventions to address the challenges around energy, logistics, crime, corruption, and other key constraints.

“If they’re not, we cannot collaborate with them,” he said. Kingston explained that the private sector has mobilised significant amounts of resources for these reforms, not just in terms of financial resources but also the work that has been put in by business leaders.

“If there’s going to be an unfriendly business approach, in the context of policies that have been adopted or approaches seen by the government, we’re not going to cooperate,” he said.

“We don’t anticipate that this will be the case – the ANC has been clear in engagements that they want to continue.”

However, he specified that this does not mean the private sector will only work with the ANC.

He said the private sector is committed to working with the government of the day as long as that administration is committed to working with the private sector.