Business confidence is on the rise in South Africa with its second consecutive increase in October, having hit record lows in 2017, amidst political uncertainty and widespread claims of state graft.
The two events in October touted by President Cyril Ramaphosa - the Jobs and Investment summit - are credited by the South Africa Chamber of Commerce for helping to boost business confidence.
Fin24 sat down with Tanya Cohen, CEO of Business Unity South Africa, the apex business organisation which played a key role in both coordinating business input to the Jobs Summit and Investment Conference about the outcomes and the possibility of an economic recovery.
Fin24: Do you think there have been enough positive contributing factors to allow SA to exit the recession in 2018?
Tanya Cohen (TC): The 4th quarter always improves. We should start seeing a pickup. Agriculture should benefit from the end of the drought, and recent steps to bolster the sector. The mining outlook should improve with greater policy certainty. We have to recognise that there’s been a decade of destruction, and demonstrate how we systematically fix it.
The question is, how do you do you really fix it? We have to take some very bold and exceptional steps to fix the structure of the economy.
Fin24: Which three things would you pick to improve the economy?
TC: There are so many… it’s important to get the foundational issues right and if you can get those operating, so that the platform works.
Firstly, improve education and skills, which are long-terms investments for the future. Secondly, fix the state owned companies (SOCs) with proper transparent and credible appointment processes for boards, staff and service providers; capacitate parastatals with the most capable people; and identify where the private sector can play a role. And thirdly, get municipalities functioning: fix energy, water, information and communication technologies (ICT), roads and other infrastructure.
- READ: The Big Read: BUSA CEO Tanya Cohen on changing tack in business after a 'decade of destruction'
We don’t think there was ever an investment strike. One of our members, Business Leadership SA (BLSA) conducted a study that demonstrates that compulsory and desirable liquidity should result in a certain amount of cash being held by business. The reality is that businesses don’t invest if the climate isn’t right. You don’t plant crops in unfertile soil… however, there is definitely a sense of greater optimism now among business. There are policy changes that signal a willingness to listen to business concerns, while recognising that a lot more still needs to be tackled.
Fin24: How do graduates get jobs in this tough business environment?
TC: There’s such a surplus of people looking for work that some kind of employment experience or work readiness training often counts more than which university you obtained your degree from.
I would recommend that graduates look out for those programmes that facilitate pathways into employment, such as Tshepo 1 million, or Harambee’s youth employment accelerator, which are just two of the many initiatives that assist graduates to transition into the workplace.
Fin24: Has business done enough to address claims of a lack of transformation?
TC: The pace and depth of transformation within business has been inadequate. Prior to the internal work done on BUSA’s transformation strategy that resulted in the BUSA document titled 'A Business Approach to Black Economic Transformation for Inclusive Growth' being released in June 2017.
Some people in business almost avoided speaking about diversity, but the document has now become our compass and it was used to guide our strategy as well as our work towards the Jobs Summit in October.
I don’t think many workplaces deal well with diversity - it is difficult to do while trying to get the job done. The workplace reflects society and ours is still largely divided along racial lines. We need to recognise that race is but one aspect of a diverse and inclusive workforce - gender, religion and national origins, as well as a number of other personal characteristics also need to be considered and embraced. We need to build our collective competence to embrace diversity in the workplace, as this can differentiate us and build our competitiveness in the 4th industrial revolution.
Fin24: Given the changing labour and business landscape, does the National Economic Development and Labour Council (Nedlac) need to be restructured?
TC: Nedlac is a really significant institution. The Jobs Summit is a neat, illustrative example of what can be done with technical teams shaping the process and a credible leadership team steering the process. However, quite a lot has changed in the world of work and we need to re-look at admissions criteria to ensure greater inclusivity and agility, while also trying to keep delegations stable and ensuring that previous agreements reached are adhered to.
This interview has been edited for clarity and brevity.
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