Warning to ANC: Business to abandon key partnership if it chooses populist coalition party

• If the new ruling coalition includes partners in favor of nationalization and new taxes, the business sector will withdraw from a successful partnership with the government, warns BLSA CEO Busisiwe Mavuso.
• More than 130 CEOs are currently working to solve the energy, logistics and crime crises.
• Mavuso criticized President Cyril Ramaphosa for signing the NHI bill before the elections.
• For more financial news, visit the website Home page News24 Business.

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If the new ruling coalition includes partners supporting nationalization and new taxes, the business sector will withdraw from a successful partnership with the government.

“We will not support an administration that touts a policy of massive economic destruction,” Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), told News24 amid continued speculation about an ANC-EFF coalition.

The EFF manifesto includes a policy of nationalizing mines, banks and construction companies, as well as the Reserve Bank, along with proposed new taxes on the wealthy and companies.

Last year, more than 130 CEOs of SA’s largest companies pledged their support for a business initiative that aims to help the government solve the country’s energy, logistics and security problems.

Top CEOs – including Neal Froneman of Sibanye and Jannie Durand of Remgro – have sponsored various lines of work that have produced great success, Mavuso said.

This included progress in the liberalization of the electricity sector, with the private sector raising R100 million to help resolve the energy crisis and putting pressure on the government to pass the Electricity Regulation Act.

As South Africa has passed 60 days without load shedding, Eskom’s achievements have not been without business support and the provision of skills at troubled power plants, Mavuso said.

She told News24:

The business also played a key role in securing the Freight and Logistics Action Plan, as well as the recovery plan for Transnet.

In addition, it helps build the capacity of law enforcement agencies in the Investigation Directorate of the National Prosecutor’s Office (NPA) and Jastrzębie, and allocates skills to these organizations. Mavuso says this will be crucial to South Africa being removed from the greylist by January 2025.

Last week, Ramaphosa signed a long-awaited amendment to the NPA Act, which aims to create an anti-corruption unit similar to the erstwhile Scorpions. This is an important milestone for the BLSA, which played a key role in pushing for its signing, Mavuso says.

He admits that business has faced a lot of criticism for supporting the ANC-led government.

“It has absolutely nothing to do with the ANC. It is bigger than the ANC. That is approximately 62 million South Africans,” she said.

“We also hope that we can continue to work with the seventh administration. “Business is fully committed to providing all the support, resources, skills, expertise and knowledge needed to get our economy over the line.”

However, unless the new administration is committed to a “reform agenda” that provides South Africa with the right policies to increase business confidence and attract investment to grow the economy, business will go away.

Coalition corruption

Mavuso also fears that the new coalition could introduce large-scale corruption at the national level.

With the ANC unlikely to win a clear majority in this week’s elections, a furious, historic deal is expected to establish a governing coalition – both nationally and provincially.

Coalitions bring benefits, Mavuso told News24. The entire range of social interests is represented. “It’s not just a question for one side to consider. There are benefits to having other people in the room, which will improve the quality of public policies and perhaps improve the quality of life.”

Effective coalitions, however, require politicians to focus solely on what is best for the country and to be willing to compromise for the greater socio-economic good.

This has been missing in South Africa and so far coalition policy has been disastrous, says Mavuso. It’s “every man for himself”, which has led to chaotic leadership as the City of Johannesburg has had eight mayors in the last two years, he stresses.

Turbulent coalitions in SA’s cities have undermined effective decision-making and resulted in the failure to deliver even the most basic services, Mavuso added. “This dysfunction could become the national norm unless the right coalition is formed.”

Business is particularly concerned that coalition talks could introduce new levels of corruption in the country as parties trade favors to secure power.

“Politicians should know that this is about South Africa and its people. “It’s not about their narrow, selfish party agenda.”

He also fears that coalition negotiations will lead to a trade-off for government positions, leaving the South African government without key skills for its portfolios.

“Because this is where the rot begins. If you’re not going to put the right person in charge, how can you expect the department or ministry they run to be actually functional?”

The new administration’s “true north” should encourage economic growth, with annual GDP growth averaging just 0.8% since 2012, Mavuso argues.

“This low growth trap will actually lead to the economic collapse of South Africa.”

More harm than good

Mavuso says the only way to solve youth unemployment is through proper development, which she says is the biggest crisis SA faces. “If we don’t address this, we will truly see an implosion and a repeat of July 2021.

“We need flexible economic and fiscal policy, regulatory certainty, an effective and efficient network industry, an efficient state and effective public services – especially at the local level, because that’s where the rubber hits the road.

“But I can now say that the NHI in its current form is not a responsive economic policy.”

Last week, Ramaphosa signed new legislation that businesses and many health care workers say has effectively ignored all their concerns in recent years.

Mavuso described the move as a desperate attempt to woo voters, and Gauteng Premier Panyaza Lesufi promised voters that voters would have free access to specialist private healthcare after the election.

READ | Busisiwe Mavuso | An unworkable NHI seriously threatens SA’s chance of becoming a regional business hub

“This is disinformation and causes concern because the electorate will expect you to keep your promises after the elections,” says Mavuso.

The reality is that NHI may not be implemented for another ten years because it is still unclear where the funding will come from. The government has estimated that an investment of R200 billion is needed in the public health system before NHI can be implemented.

Business supports the NHI, but not in the form in which Ramaphosa signed it into law, which rules out private medical administration, says Mavuso.

“We have said over and over again that this is something that is unfeasible, impossible to finance and implement. It will really do much more harm than good.”