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A nod to the president

There has been some public sector improvement, writes BLSA’s CEO.
Image: Moneyweb

Government consists of over two million employees and has a budget of R1.8 trillion. That makes for a vastly complicated institution that is going to present all kinds of management problems. Of course, the business sector is far larger in terms of people and money, but it is divided into companies that are individually smaller and more manageable.

I am reminded of that because it is easy for us in business to criticise, given our own experience of running institutions. The HR and financial management challenges of government are going to be massive.

While being CEO is no walk in the park, especially when you must compete in a dynamic market unlike the civil service, at least you can maintain a tight focus and act decisively when needed. In contrast, President Cyril Ramaphosa must manage multiple, complex stakeholders and a vast organisation. It is like turning an oil tanker while you have fires on board, and you only have your job for five years before political forces can turn against you.

I was reminded of this when reading the Auditor-General’s [recent] report.

Read:
Auditor-General continues to push for accountability
Slight improvement in SOE audits is ‘nothing to celebrate’

I noted in my Business Day column that it shows a modest improvement in the culture of accountability in the public sector. Auditor-General Tsakani Maluleke noted that irregular expenditure among national and provincial government departments decreased to R54 billion from R66 billion in the previous year. Some provinces like Limpopo showed a marked improvement, while others like the Free State deteriorated. Overall, though, the trend is in the right direction.

I see in this a return of accountability, to some degree, across the public sector. It reflects the impact of the president’s efforts to shift compliance levels across the country.

The president is also making progress in another major area of deterioration under President Jacob Zuma: the capacity and skills levels in the public sector. The exodus of skilled people from the public sector has been devastating, leaving institutions from municipalities to national government departments without the skills or competence to implement projects or provide services. Poor audit outcomes are one consequence; another is the collapse in infrastructure investment in the public sector, as the engineers and project management skills just aren’t there. Citizens feel it in the weak public services provided.

The cabinet has approved the National Implementation Framework towards the Professionalisation of the Public Service and the draft framework is now open for public consultation. The framework has many elements to it, from how civil servants are recruited, to their development and retention. The objective is to depoliticise the civil service and insulate it from party politics, while driving accountability and competence. It recommends more rigorous recruitment processes for directors-general and deputy directors-general, with independent experts used in the recruitment and interviewing processes, ensuring higher quality in key management positions. The framework is being developed under public service and administration minister Senzo Mchunu.

These HR and financial management improvements should be applauded. But in the meantime the serious capacity constraints in government have to be managed. One mechanism that we have consistently pointed to as BLSA is to make better use of the private sector. We detailed the need and mechanisms for this in our report last month on the infrastructure challenge. When it comes to infrastructure investment, for example, we have set out in detail how capacity problems in the public sector, both skills and capital, can be alleviated in partnership with the private sector.

Read: The state of infrastructure investment in SA

The private sector is already working to support state capacity through Tamdev, an initiative to second highly experienced retirees to work with public sector leaders to relieve constraints and develop capacity. Partnerships can also more explicitly draw on private sector project and engineering skills, as well as financial structuring and access to private pools of capital for infrastructure.

Organised business is ready to support the president in his efforts to improve the performance of the civil service and ultimately the quality of services received by all South Africans. The progress so far has been positive and we stand ready to help drive it forward.

At one stage last year, things were so dire that there were projections of a tax revenue shortfall of as much as R300 billion, I wrote in Business Report. Fast forward to 2021 and Sars has collected R38 billion more than forecast, with the mining sector contributing 57% more to tax revenue than the year before, as their profitability rose due to higher commodity prices.

Read: Sars exceeds revenue targets

This is actually a missed opportunity: were the right policies in the mining sector already in place, our rebound would have been much stronger and, more importantly, our recovery quicker.

Busi Mavuso is CEO of business Leadership South Africa.

COMMENTS   11

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The alleged improvement is of such a magnitude that you would require an electron microscope to view it !!!

Unless the DMR sorts out their policies, it will be the third commodity boom that SA has missed. Where are the junior explorers and miners getting projects up and running? Not in SA that’s for sure.

“Fast forward to 2021 and Sars has collected R38 billion more than forecast, with the mining sector contributing 57% more to tax revenue than the year before, as their profitability rose due to higher commodity prices.”

This has nothing to do with the president, the ANC or the “civil service”. It is in spite of their best efforts to derail the economy. At least be honest.

And where was “his excellency” during the “deterioration under Zuma”?

This is the same guy that is saying BEE is here to stay??? Yet there is a shortage of skills??

There is a problem here. A leadership problem. Leadership is just cadre deployment. We expect an ex freedom fighter to run the country??

You cant keep doing all of the above AND MORE and then expect an improved outcome??

“Organized Business” must tell “his excellency” the truth and be a bit more reserved with the applause. “Organized Business” should also stay away from politics. Unfortunately in this country “Organized Business” has not been spared the cadre deployment curse so staying away from politics would be rather difficult.

SA Business needs to form a local ANTIFA group aimed specifically at the anc fascists!

Here’s what I can’t understand – she is 39 (per article) she has been in various businesses for 23 years – effectively she started her business life at 16 – really. Are these listed facts accurate

If we can have highly successful and profitable companies with a workforce that resembles the demographics of the nation, then, in theory at least, the national and local governments and SOEs should also be profitable and efficient.

Take Shoprite for instance. They select workers from the community. Shoprite is the most successful retailer in the country. The people at Shoprite satisfy the needs of consumers by providing an efficient, friendly and cost-effective service to the community. What is this catastrophic force that prevents similar people with similar skills from the same community to provide cost-effective and efficient services to citizens?

If Shoprite can be profitable by serving the poorer part of the community, it implies that the lack of service delivery and the implosion of government finances cannot be ascribed to the moral fibre of government employees or the lack of skills! The municipality uses the fact that the community is too poor to pay for services as an excuse for its bankruptcy, while the Shoprite store within that same community is profitable!

What is the difference between the bankrupt emerging farmer and the commercial farmer, the bankrupt municipality and the viable construction company, the bankrupt SOE and a profitable food retailer and the poor quality of education at a state school and the excellent marks at the private school?

One word, accountability, describes the difference in outcome between these systems that are operated by the same people. Property rights incentivise and enforce accountability from top to bottom. More social engineering cannot save this country from collapse. Only privatisation can save the economy, create jobs and deliver services sustainably.

The profit motive, property rights and the competitive force incentivize the entrepreneur to solve all your social problems and provide in all your needs for products and services at the lowest cost.

Our problem is not the lack of skills or human material. Our problem is shortsighted and cheap socialist dogma on a national level.

Guess we have to try and conjure up something “positive” while we go down the gutter.

Another advert on Moneyweb.
Does this lady pay you to publish her nonsense?

A nod and a wink…

HA HA!….JUST TAKE A STROLL DOWN YOUR STREET.

End of comments.

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