Good start tackling investor negativity, Mr President - but a key stakeholder was absent

Within a few months President Cyril Ramaphosa has done his best to tackle investor negativity in South Africa. However, creative ways to engage the unemployed must be developed.

The job summit and the investment summit were a success. So was the excellent work done to produce the new Mining Charter.

All these have demonstrated without doubt the willingness of Ramaphosa's administration to work with labour and investors to unlock growth potential and create jobs. Negativity had become a currency. So the confidence-building measures are commendable.

Implementation, please

From employment creation perspective, the practical results of the summits, Ramaphosa's overall stimulus package and his strategy to rebuild good governance are yet to be realised. The summits were successful only as part of the first and significant steps we needed to take as a country emerging from under water where we were drowning ourselves.

More still needs to be done for us to enter into the much-needed sustainable growth phase. The phase must create jobs at a fast pace, introduce new black economic empowerment deals that benefit new players (not just the usual suspects), particularly black women, and broadly uplift communities and workers.

Predictably, the two summits for jobs and investment were dominated by labour, investors and government. Coming as we did from a period where lack of trust between the three had begun to cause destructive hostility instead of constructive engagement, it was indeed necessary and understandable to start repairing trust.

The absent stakeholder so far has been the unemployed. We should find meaningful ways to bring them into the centre of the discussion as participants.

There must be ways to communicate with the unemployed directly, hear their stories and, where feasible, work with them to create employment potential.

If investment summits are held in Alexandra or in rural areas, for example, investors would also realise the facts of unemployment, poor infrastructure, unacceptable levels of housing, basic sanitation and education. This could trigger government and business to come up with joint solutions currently expected from government only.

Beyond populism

We must not leave the unemployed exclusively in the hands of populists. In the end, it is us the entrepreneurs who will provide jobs. While political mobilisation is important as an essential part of our vibrant constitutional democratic system, we should find additional ways to engage the unemployed in less emotional ways.

The consequences of sustained unemployment are not only the usual social ills such as crime and drug abuse. Unemployment could be a contributing factor to the lack of appreciation of community infrastructure that is often vandalised.

Not only should communities learn to appreciate government investments in the form of public infrastructure such as schools, clinics, bus stations and others. They also need to appreciate and even invite private investments that have a potential to bring jobs.

But until the corporate sector develop ways to involve the unemployed in our high-level summits and decision-making structures, we will not manage the frustration. Nor would we be able to address their needs as part of creating a conducive investment environment.

In the resources sector, we have a Mining Charter that provides a framework for stability in relationship between investors, workers, communities and the government. Now, the industry and the Department of Mineral Resources have to work hard to ensure communities take advantage of the new charter and to engage constructively with investors who bring much-needed capital and create jobs.

During the colonial/apartheid era, many communities where mining took place were left poor because there was no policy mechanism to empower them. Now that the Mining Charter and other government regulations provide for empowerment of communities, the challenges are ensuring awareness and constructive implementation.

The Grace judgement, delivered unanimously by the Constitutional Court in October, reinforced the need for adequate consultation with communities residing on communal land. The Xolobeni judgement of the High Court November went beyond the need for consultation and gave communities the right to veto mining. The latter judgement seeks to usurp government’s authority to grant or withdraw mining rights. It remains to be seen how Mineral Resources Minister Gwede Mantashe will handle it to ensure regulatory certainty.

But broadly speaking, these judgements pose a challenge to the mining sector to find new, better and respectful ways to engage stakeholder. The starting point must be the new mining charter that specifies a minimum five percent shares for communities and workers in new mining ventures. The ultimate aim must be to undertake mining operations that will benefit communities.

New ways of empowerment

Unfortunately, resentment to investments due to our sad history of land dispossessions, old-style corporate top-down engagement, divisions within communities and ideological lobbying by anti-mining fundamentalists can combine to frustrate job creation and genuine community empowerment.

The Department Mineral Resources must find ways empower communities with information about the benefits of the new mining charter. This will help communicate engage better with investors who must also support the charter.

Responsible companies should find it fulfilling, not a nuisance, to engage with communities who are prepared to use the Mining Charter to benefit from wealth-sharing arrangements and job opportunities. Despite the negativity that dogged the sector in the past, it still has a huge potential.

It is unacceptable and scandalous that a peaceful and democratic country that is a world leader in natural resource endowment – worth $2.5trn according to research by Citigroup – is also among world leaders on unemployment, at more than 27%.

Bayoglu is the managing director of Canyon Coal. Views expressed are his own.

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