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Red tape and trust

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Red tape and trust

21st August 2015

By: Terence Creamer
Creamer Media Editor

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The meeting of the Presidential Business Working Group, which took place in Pretoria earlier this month, agreed that steps should be taken to address regulatory impediments to economic growth and investment, including processes to deal with “unintended consequences” associated with South Africa’s new visa rules and prevailing uncertainty regarding mining empowerment.

President Jacob Zuma hosted the meeting, which was attended by Cabinet Ministers and business leaders aligned with both Business Unity South Africa (Busa) and the Black Business Council (BBC).

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The meeting continued well into the afternoon, reflecting a mood of greater urgency, precipitated by the country’s weak economic performance, as well as the prospect for large-scale job losses in the mining and steel industries.

Prior to the gathering, business leaders had also become increasingly vocal about the crisis facing certain sectors, especially those affected by the sharp decline in commodity prices.

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Addressing the media following the meeting, Trade and Industry Minister Dr Rob Davies said a consensus had emerged that South Africa was not performing to its potential, even after taking into account the headwinds associated with the end of the commodity super cycle.

Former Standard Bank CEO Jacko Maree, representing Busa, said attention had to turn to addressing those blockages within business, government and labour’s control. By tackling those “micro issues”, he said, South Africa had a good chance of boosting the overall growth rate, despite the unfavourable international climate.

Davies reported that there had been an agreement on a fact-based engagement “on the possible unintended consequences of the new visa regulations”, and that the current legal approach to finding resolution to the issue of black economic-empowerment ownership of mines should be halted in favour of a consultative process.

The working group dealing with the regulatory impact on investment would also be pursuing mechanisms for the simplification and streamlining of regulatory procedures for investment, covering issues as diverse as company registration through to the shortening of lead times for environmental licensing.

Davies indicated there was also broad-based support for government’s nine-point plan for dealing with the current poor economic performance, which covered the revitalisation of the agriculture and agroprocessing value chain; advancing beneficiation and adding value to the country’s mineral wealth; more effective implementation of a higher-impact Industrial Policy Action Plan; unlocking the potential of small enterprises, cooperatives and township and rural enterprises; resolving the energy challenge; stabilising the labour market; scaling up private-sector investment; and growing the ocean economy.

Davies, Maree and the BBC’s Ndaba Ntsele also criticised the current “narrative” of a so-called “trust deficit” between government and business, with Ntsele arguing that the relationship was resilient enough to ensure that the “difficult issues” were being raised and addressed.

Maree described the charac- terisation of the relationship between government and business as one lacking trust as “not particularly helpful”. “The real issue is: Are the parties coming to the table genuinely and discussing and arguing in good faith? I think the question should be whether the interactions between business and government are in good faith and I would say: ‘Unquestionably’,” Maree stated.

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