Why B20 matters for South Africa’s economy – roadmap for economic growth

South Africans are hearing a lot of talk about the G20 and the B20, but there seems to be a disconnect about what it means for them.

What it means is that the country can leverage its position as host of the G20 to turn global policy insights into immediate economic interventions.

This is especially important since the country has a looming loss of 250 000 jobs across supply chains, compounded by US tariffs.

That is why Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), writes in her weekly newsletter that last week’s handover of the recommendations of the B20 was an important moment to reflect on the opportunity the G20 provides for South Africa.

“A great deal of work has gone into the B20 process, led by South Africa’s most senior business people and many contributors from across the world. The recommendations will be considered by the G20 and will hopefully inform the decisions that the governments of the largest countries in the world will take to ensure Africa’s prosperity.”

250 000 jobs on the line

She points out that while South Africa will have significant influence on the G20 process as hosts, it is a global effort requiring international work. “But looking through the recommendations of the B20 task teams, there is much that we in South Africa can take on board in our efforts to turn around our economy.

“A turnaround must be our urgent priority. The department of employment and labour last week highlighted that recent retrenchment announcements could wipe out 250 000 jobs across supply chains. With more still to come, this is catastrophic.

“The B20 recommendations provide a tested playbook for exactly the kind of rapid, targeted interventions we need. Not abstract global policies, but concrete reforms that other emerging economies successfully implemented under similar pressure.

“The beauty of the B20 approach is that it breaks down complex economic transformation into actionable pieces – exactly the kind of incremental improvements that work, rather than the grand plans that typically stall in committee rooms.”

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However, Mavuso says, the challenges are complex, but the B20 framework shows us how to tackle them systematically. She uses the example of the global trade situation, where the B20’s trade facilitation recommendations become even more critical when we consider that US tariffs are forcing companies to make brutal decisions about production lines.

“We cannot control Washington’s trade policy, but we can control how quickly we implement the B20’s recommendations on digital customs systems and export procedures to help our manufacturers pivot to new markets.

“US negotiations remain far from straightforward, given the multidimensional demands that stretch deeply into our sovereignty as a country, as well as the volatility around US global strategy. Our government is working to engage, but it is a complex process.”

Bold and urgent action needed

Meanwhile, Mavuso says, we need bold and urgent action in those domains that are within our control. “What is our strategy to stimulate the auto sector and get it ready for the new markets it will have to serve? More importantly, what is our implementation plan and are we rapidly progressing it?

“The B20 recommendations on special economic zones provide one answer on how to rapidly create an environment that will restart manufacturing. With 250 000 jobs at risk, fast-track manufacturing zones in automotive and renewable energy could absorb displaced workers within months, not years.”

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Mavuso says we must also look at how we are using our own tariffs to strategically promote key domestic industries and enable them to scale and whether business and government are working closely enough to rapidly respond to issues as they arise?

“Is government ready to move fast to solve specific problems? The B20’s emphasis on industry-led partnerships shows us exactly how this collaboration should work.

“Development happens because of many incremental improvements, rather than grand plans. Simple things add up, from fixing the visa regime to making it easier to get documents from home affairs through banks, to giving people title deeds to their homes.

“These align perfectly with the B20’s regulatory streamlining principles: focused reforms that do not require grand plans, just decisive action. The B20 provides clear policy changes we can implement immediately to address our jobs crisis.”

Job creation and skills matching

Mavuso says immediate interventions must focus on job creation and skills matching. Government should use the special economic zones with fast-track permitting for manufacturing investments in automotive, renewable energy, agri-processing and other sectors that can quickly absorb and retain displaced workers.

Simultaneously, she says, government should reform labour regulations to allow flexible employment arrangements while strengthening worker protections and create industry-led skills development partnerships with mandatory private sector participation that directly addresses the skills mismatches driving our unemployment crisis.

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She points out that infrastructure enablers require targeted institutional reforms. “Establish blended finance institutions that leverage public capital for infrastructure and SMME development, while reforming banking regulations to expand financial inclusion.

“Deploy national broadband infrastructure, create digital literacy programmes and implement comprehensive trade facilitation measures, including digital customs systems and streamlined export procedures that position South Africa as a regional manufacturing hub. These could help make real the R1-trillion earmarked in the budget for infrastructure investment over the next three years.

“Prioritise national broadband infrastructure deployment, create mandatory digital literacy programmes in schools and communities and establish robust cybersecurity frameworks. Implement comprehensive trade facilitation measures, including digital customs systems, streamlined export procedures and aggressive pursuit of bilateral investment treaties that position South Africa as a regional manufacturing and services hub.”

B20 reports show how economic growth can be advanced globally

Mavuso says these proposals are just some among the extensive recommendations contained in the reports of the eight B20 workstreams. “They are a valuable contribution to thinking about what can advance economic growth globally, but more importantly, they should spur us to act fast domestically as we confront the serious crisis we are facing in our economy.

“It sometimes appears that maintaining the status quo is the least risky option for policymakers. But I think it is becoming very clear that therein lies disaster. We cannot continue to function in the same old ways, while the jobs bloodbath is running riot across our economy. We need the public sector to become intensely focused, just as we are in business, on how we overcome the challenges and ensure our economy can deliver for our people.”

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She says the B20 handed us a roadmap, while the jobs crisis gave us a deadline. “The only question now is whether we have the political will to act with the speed that business demands and our people deserve.

“We must make fast decisions and implement them quickly. We must seek out the incremental changes and not be overwhelmed by complexity or endlessly planning. Above all, we need to act.”