Business / Business News

Sasha Planting
2 minute read
29 Feb 2016
7:35 am

Three-step plan to save South Africa

Sasha Planting

It’s not going to be an easy job preventing the economy sliding over the ratings cliff.

South African flag. Picture: Refilwe Modise

Talks led by Finance Minister Pravin Gordhan and President Jacob Zuma with SA’s captains of industry have identified three initiatives to revive economic growth and job creation. They are: preventing a credit rating downgrade; accelerating growth of small and medium enterprises; and identifying investment projects in key economic sectors.

Unified

“We have started working together at a time in SA when we are as close to a perfect storm as we could be,” says head of the Banking Association of SA Cas Coovadia. “If business and government don’t work together, we will not turn this around.” Preventing a ratings downgrade is convened by Nedbank’s Mike Brown and Old Mutual’s Ralph Mupita.

Fiscal consolidation and reducing the risk state-owned enterprises (SOEs) present to the fiscus are the focus. Business will bring private sector expertise to the boards of SOEs to help reduce their drain on the fiscus and position them to contribute to growth. In addition, it will participate in public-private partnerships in the energy sector and support (with the provision of high-level skills) government’s efforts to review regulatory blockages to investment and starting and growing businesses.

The second group, led by entrepreneurs Adrian Gore and Brian Joffe, will develop ways to empower entrepreneurs. “If SA is to create jobs in the numbers we need, while accelerating economic transformation and reducing inequality, we must give our SMEs a boost – in skills, capital and access to export markets,” Gore and Joffe said. Lastly, business will focus on driving investment into targeted sectors of the economy.

Standard Bank CEO Sim Tshabalala and the head of the Public Investment Corporation, Dan Matjila, will lead this. “For each sector selected, we will contribute private sector expertise to create an urgent, detailed plan to remove barriers to growth, protect existing jobs and drive growth,” the pair said.

Calendar countdown

Specific details of the three initiatives will be announced soon. “There is a different energy in these conversations with government,” says Coovadia. “We all recognise that we need to act decisively and we need to act now.”