'We like each other', says Godongwana after billionaire slams ANC govt

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Finance Minister Enoch Godongwana.
Finance Minister Enoch Godongwana.
Simphiwe Nkwali/Gallo
  • Finance Minister Enoch Godongwana on Thursday said it was clear that government, business and labour had to make tough decisions to improve South Africa's economy.
  • He emphasised that government had to remove barriers for growth and investment for business as an urgent priority.
  • Godongwana added that increased investment was South Africa's best bet at making a strong economic recovery.

Tough talks will be necessary with both business and labour about "hard choices" that need to be made in order for the economy to grow, Finance Minister Enoch Godongwana said on Thursday.

He also considered recent criticism from billionaire Rob Hersov to be a wake-up call.

Godongwana was speaking at the Sunday Times Investment Dialogue, an Arena Holdings event held virtually on Thursday afternoon.

He emphasised that government had to remove barriers for growth and investment for business as an urgent priority.

But the minister – who previously served as chair of the ANC economic transformation committee – also appeared at pains to point out that he had a strong relationship with prominent business leaders, including economist Iraj Abedian, former Absa boss Maria Ramos, former Anglo American chair Leslie Boyd, and Hersov.

The latter recently spoke at the BizNews investment conference, saying, among other things: "This is our government and if they're destroying the country, vote them out."

'I love Rob very much'

Godongwana said the best chance President Cyril Ramaphosa's Economic Reconstruction and Recovery Plan had of success was if the confidence of the business sector were restored in the SA economy.

He said that in his work as a member of Cabinet and a member of the ANC's National Executive Committee, it had become clear to him that government, business and labour had to make tough decisions to improve the state of South Africa's economy.

"We have to have a conversation with business and labour about the hard choices that we have to make in order for business and the economy to grow," said Godongwana.

Regarding Hersov's remarks, Godongwana said they had been friends for years and that he considered the billionaire's remarks to be a call for government, business and labour to get on the same page.

"I have known Rob for years. On my appointment, he was one of the people who first congratulated me. I have known him, and he belongs to a family with a history of investment. I don't think Rob hates South Africa. The message he is sending is that his company is promoting investment.

'It's more difficult to sell SA'

"He is saying that it is becoming more difficult to sell South Africa for a number of reasons. He is not being anti-South Africa, like some have suggested. I love him very much, we like each other. He was sending a message that we have to change course, and I agree with him," said Godongwana.

Ramos also got a mention, as Godongwana said government needed to leave over-regulation of businesses in the past if it hoped to drive business to invest in South Africa and create jobs.

"Leaders in the sector have told us there are 208 regulations that regulate banks. Maria Ramos said each of the banks has to employee 3 000 people just for compliance. My sense is one thing we need to do is ensure businesses that want to do business in South Africa can do it before we call businesses outside of South Africa to invest."

Godongwana mentioned Boyd's direct demeanour when communicating, saying that it was often necessary to be blunt about the economic situation that South Africa found itself in.

Godongwana said when Luthuli House invited Abedian to talk to them, the ANC members held an "incorrect" view that South Africa was gripped in an investment strike. He said companies in South Africa want to invest but cannot because the ANC is not creative a conducive environment for investment.

"On the public infrastructure side, we are grappling with an instrument on how to do this thing. We want to bring the private sector into this infrastructure spend. On the one hand, there is pressure from my political party to say we use prescribed assets.

"These assume that business do not want to invest in certain asset classes, in particular infrastructure. We should deal with this and make these infrastructure investments. We need to create an appropriate instrument where the private sector can put money in and invest in infrastructure investment," he said.

He said government's approach to addressing the energy challenge should focus on fixing energy supply instead of focusing narrowly on fixing Eskom. He said this is an important reason why the Economic Reconstruction and Recovery Plan focused on energy reforms.

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