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Sacci urges businesses to work together to overcome difficulties facing S African economy

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Sacci urges businesses to work together to overcome difficulties facing S African economy

Photo by Duane Daws

23rd September 2015

By: Schalk Burger
Creamer Media Contributing Editor

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South Africa’s current account deficit, balance of trade deficit, increasingly complex and simultaneously increasingly ambiguous regulatory environment and falling domestic investment, is placing the economy under significant strain, says South African Chamber of Commerce and Industry (Sacci) president Vusi Khumalo.

"On top of this, government's budget has increased significantly, tax revenue has been falling and the number of government employees has increased appreciably (and proportionately its wage bill), while the rand has weakened," he commented in a keynote address at Sacci’s yearly convention on Wednesday.

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Khumalo added that Sacci had seen several members leave the chamber in the past nine months, with many noting in exit interviews that the biggest reason was the need to cut costs.

"South Africa also faces an infrastructure backlog, has a poor education system and vexing labour relations. These matters are of grave concern. If they are not addressed, we are sitting on a time bomb," he asserted.

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Khumalo was doubtful that commodity prices would rebound in the near term, stating that businesses and chambers had to consider the impact of this and try to come up with initiatives to ensure that this did not add more strain on the domestic economy.

"South Africa needs new ideas and action solely based on economic reality to create the growth that is so badly needed and there is no better time than now. Hence, all must collaborate and partner to solicit inputs that can take us out of this rut, invigorate the private sector and address the conditions that inhibit growth," he added.

Further, Khumalo noted that there was a raft of new legislation and regulations that would likely lead to higher costs of doing business. This made it difficult to justify new investment, be it domestically sourced or foreign, and South African companies were investing internationally, much of it in Africa, rather than at home.

"This is an issue that we need to contend with and need to address. We need to partner and ensure that the outcomes of the laws and regulatory changes yield the desired results."

However, despite the visible impact of economic stress in South Africa, Sacci noted that it had had significant success in broadening support and participation among small businesses, specifically in townships and disadvantaged areas.

"We have a growing number of chambers in the townships and disadvantaged areas. Many of the emerging enterprises are catered for through these new chambers. There are many activities that are taking place in these new chambers, too many to enumerate, but the sensitisation process is strong, and we have affiliated chambers in Alexandra, Diepsloot, Dobsonville, Lisikisiki, Sebokeng and Vaal Triangle."

Khumalo noted that the focus of partnering with business formations in these areas reflected the history of South African business.

Greater Alexandra Chamber of Commerce and Industry (Galxcoc) president Mpho Motsumi told delegates at the Sacci convention that the chamber was finding it difficult to obtain support from sector education and training authorities (Setas), specifically in terms of training, for its members.

"We have a programme of uplifting informal traders in the area and we have partnered with several Setas, specifically the Wholesale and Retail Seta, but we have experienced delays when they do not adhere to timelines or training programmes,” he said, explaining that this prevented the chamber from achieving the development goals it had set.

Meanwhile, Sacci members and affiliated chambers adopted four motions that would be formulated and submitted to government for consideration.

Members gave their support for the development of an ‘entrepreneurs bill of rights’, which would emphasise the importance and relevance of entrepreneurs and start-up businesses, including enshrining their right to structure their businesses as they see fit but in line with relevant laws.

The intention was to promote the growth of small, medium-sized and microenterprises to facilitate job creation and economic growth.

The second motion would see the creation of a policy aimed at having more renewable energy included in South Africa’s energy mix, providing suitable access to the grid for transmission and distribution for independent power producers and determining the role of State-owned power utility Eskom, specifically with regard to sole generator and management of transmission and distribution.

The third motion focused on developing policy inputs to highlight the potential unintended consequences of South Africa’s adopting a national minimum wage, a process for exemption if such a policy is adopted and consideration for special cases, such as trainees and apprentices, as well as due regard for international precedent.

The fourth motion called for a complete overhaul of Setas, as the intended impact of the skills levy and training was not materialising, despite significant unemployment in South Africa worsened by a grave lack of skills.

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