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Business must lead SA’s rehabilitation

If only in its own self-interest.

As a country, South Africa is still coming to terms with the scale of the damage inflicted during Jacob Zuma’s presidency. The incompetence and corruption that characterised that administration have had far-reaching consequences.

Speaking at the CoreShares ‘Think Index Investing’ Convention in Johannesburg last week, the CEO of Business Leadership South Africa, Bonang Mohale, delivered a blunt assessment of how much had gone wrong.

“We were lucky to emerge from those nine wasted years,” said Mohale, “because if our democracy was not robust, if our institutions did not hold, there is no country in the world that could have survived the type of systemic and systematic state capture that we were subjected to.

“That we have survived to tell the tale is testament to the wisdom of our forebears to give us the best constitution in the world.

“They put in place the institutions of democracy so that this is a country of laws, not a country of men.”

The cost

The damage, nevertheless, has been immense. By taking into account what has come out of the parallel commissions of inquiry, Mohale believes R1.5 trillion has been wasted or looted in the last four years.

In itself, that number is “quite frightening”. However, there have also been indirect costs that have not necessarily been as widely recognised.

“For example, Transnet had the opportunity to place an order for 1 064 locomotives,” Mohale noted. “We decided to give the contract to China South Rail, even though there are two companies in Springs [in Gauteng] that have manufactured all of the trains that are currently in operation.”

One of those companies is Union Carriage, which is now struggling under the prospect of having no work. That is a cost to the local economy, to jobs, and will potentially lead to a loss of scarce engineering skills.

There have also been impacts down the supply chain.

“We killed a company that was owned by Anglo American called Score Metals just in the middle of doing a BEE deal because its value depreciated by 90%,” Mohale pointed out. “It worked in the beneficiated steel market.”

This obviously works counter to the imperatives of developing local industry, particularly those businesses producing value-added products. It’s an indictment of how the ripples of state capture spread far beyond just the high-profile cases of corruption that have been revealed through the commissions of inquiry.

A turnaround

President Cyril Ramaphosa has recognised the immensity of the task of halting the theft and wastage of national resources. His efforts to clean up the South African Revenue Service, restore the strength of the National Prosecuting Authority and repair state-owned enterprises have been substantial.

However, Mohale is adamant that this cannot be left to government alone. Business must play a role, and encouragingly, the president is encouraging its input.

“On the Friday before the president announced his cabinet he met with us, so that the voice of business could be heard,” said Mohale. “We are not in the business of lobbying for individuals, but we are in the business of ensuring that broad principles are adhered to.”

The message that business presented to the president was that this is not the time for experimenting.

Economic management has to be a priority for his government.

“The focus in the last 25 years was on economic policy formation,” said Mohale. “But we are very poor on execution. All our problems and their solutions are known. It’s now the doing that’s important.”

Finding purpose

Business, however, has to be willing to play its part. For Mohale, that means meaningful introspection about what the role of business should be. A blunt focus on maximising profits and financial returns for shareholders will not suffice.

“If we repeat that mantra in 2019 we will come unstuck,” Mohale said.

“We must really reimagine and redefine our purpose for our own development and enlightened self-interest.”

Business cannot survive independent of the society in which it operates. It is therefore imperative that it actively helps to shape and sustain the kind of society it needs in order to thrive.

“Business must be the one to say that we must pay our employees a decent living wage so that they can afford the goods and services that we produce,” Mohale said. “It’s not job creation. It’s the creation of the future market, because if you have a market, then you are in business.”

It is also imperative that business builds public trust in itself.

“To do that, we must be true to what we say,” Mohale argued. “Business must also do no harm – no harm to its own employees, no harm to the society, and no harm to the environment.”

Finally, business must give the country ethical leadership, which is vital for attracting and retaining foreign direct investment, driving economic growth and ensuring job creation.

“You can’t have the Steinhoffs, the Tongaats, the McKinseys, the SAPs – it taints business with a bad brush,” Mohale said.

Only through ethical leadership can business have the moral authority to take the country forward.

“Business really needs to lead on big issues – transformation, on getting us out of this fiscal crisis, on job creation, on growing the economy, and taking education seriously,” said Mohale. “It is understandable that business confidence is so low, but we are speaking to our members and saying: this is where we need to lead.”

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Just look at what TRUMP did in America by cutting certain taxes and a multitude of government regulation. You think someone in this country, with a brain would learn. Me thinks NOT! Get rid of BEE. You are hurting your own economy under the guise of helping. Although that may be your mantra? I watch how the government STEALS from the poor under the guise of helping, V.B.S. bank just one small issue

Just love the ne SA attitude:
-ANC cadres take over
-They demolish and loot
-They stuff everything up.
-They line their own pockets.
-When the golden eggs get smaller and smaller, shout HELP to those who had been kicked out to come and rebuild- – – only to be looted again.
-No thanks – Top Businessmen, go add your experience and value in other countries where you would be valued continuously

We will then be required to pay a Zupta tax for the looting to save Eksdom.

So Mr. Bonang Mohale says business must do more.

Last time I checked, we’re a socialist state so that’s the government’s role to do more. They’re paid generous taxes to do so.

By asking business, esp struggling SME’s to do more is asking for another layer of taxation, demanding shareholders to fund a charity and hard working folk to keep funding a state that has proven incapable of delivery.

And now you wonder why we have mass emigration, capital flight and economic recession?

Right On!!!
I wish we can stop calling reverse-racism “transformation” and stop pretending like state capture is over. Anyone who thinks we have “emerged” from that is demented and misguided. Perhaps Mr Mohale is advising Multichoice – both parties appear more interested in politics than business, and Government appears to be more interested in business than politics….

Business didn’t destroy this country, but now they must fix it???
Yet again no accountability from those elected to govern. Like the ‘joint accountability’ for ESKOM’s disaster – I paid my bill every month, Soweto never seem to.
The ANC promised their naive voters free electricity and now that the truth is biting very hard – NOTHING is EFFING for free! – now all the citizens must pay for your lies, impossible promises and ineptitude.
I curse every single socialist/communist/marxist naive fool.
Wake up.
This is the real world.

How could business lead if they are hamstrung by all sorts of legislations? A company could try to compete on the world markets but they have to have BEE partners which increases the initial capital cost, have to employ people according to their race not according to their abilities which increases the cost of production. Any company which is serious about supplying the rest of the world simply shifts their headquarter overseas or sets up a separate company outside SA thereby shifting their profit and tax also outside of the grubby hands of the ANC.

Ramaphosa’s first and most important test is a dismal failure. The tiny part of the nation that contributes to the economy waited for action against Eskom. We gave him the opportunity and time to break up Eskom, shrink the workforce, get private investors to sort out the mess and fast-track green energy projects. To our shock and dismay, The Sona proved to be the biggest non-event of the year. Come to think of it, the Sona actually was an accurate and precise display of the State of the Nation. A lot of incompetence parading as competent. Many criminals parading as saints. Self-interest parading as benevolence and goodwill. A lot of pretences but zero substance. The president uttered thousands of words without saying anything. This is the actual State of the Nation all right.

It seems as if socialist political systems implode as a result of a failure in the energy sector. Venezuela imploded after the crash in the oil price. The USSR imploded after the explosion at Chernobyl, and the ANC will implode after the implosion of Eskom. It is clear that BEE is the umbilical cord that connects Luthuli House to Eskom. Luthuli House is a premature baby, unable to survive without the patronage from Eskom.

Chernobyl was a manmade disaster of epic proportions. It exposed to incompetence, inefficiencies and lies of the typical socialist system. Eskom is fast becoming our manmade disaster of epic proportions.

‘epic proportions’ lol. THere have been bigger bus accidents in terms of lives lost. Also bigger nuclear accidents in terms of lives lost. Calm down. It is just a netflix series.Try and keep things in perspective.

Perhaps Bonang should be reminded of that famous economist’s quote: “The business of Business is business.” Optimise profit and you optimise all social benefits – you create the greatest benefit for the greatest number.
Let us not ask businessmen and women, who understand their own businesses but usually very little else, to try to do things, the impact of which they are seldom able to understand or even measure.
What Mr Mohale should be doing is to demand that government GET OUT OF THE WAY. The breathtaking burden of red tape in SA is today an almost insurmountable barrier in just about every field of business for new and small entrepreneurs.
We must be told of precisely which regulations are to be repealed and when. Trump’s ‘two for one’ idea would be a god place to start.

I honestly don’t see how we have emerged from the “wasted nine years”. If we “WERE” subjected to state capture the presumption is made that it is behind us and dealt with.

How? Anybody locked up?

If business or anyone believes that this is the case it is naive to say the least and if this represents “the voice of business” in this country. Well no wonder.

If we can believe the media, it seems CR has to now fight for survival instead of sorting out the mess. Two steps forward and three steps backward.

Everywhere we see jobs being lost in the private sector but the ANC continues to suck the life out of our country.

It appears that the Public Protector is politically motivated to the Zuma factions to create more ANC in fighting. CR has a fight on his hands.

The un-holy list system of our so called democracy is killing the nation – thanks to the ANC.

In the recent Eskom v Trillian judgment the judge remarked that the NPA was now longer a party to the case. It had an asset forfeiture order in place against Trillian, but allowed it to lapse.

Friday Adv Hermione Cronje, speaking at an event, assured everyone that her unit has enough money. The only difficulty is “deciding which cases to pursue”. So not only will the NPA pick and choose, it has not even started that process.

Of 700 SIU cases referred to the NPA over the past decade not a single one has resulted in prosecution. That unit is now headed by Adv Willie Iscariot.

The lesson for business is that under ANC rule complying with the law means suffocation. Do whatever you want and get away with it. That was also the president’s message on Thursday: there are no consequences, only delirium.

I agree with most of the sentiment here- apart from Donald Trump doing great things…in my opinion he has done more harm than good – but that’s another debate.
BEE and red tape are prohibiting SA from trying to regain some semblance of a balance in its socio political economy. Just ridding SA business environment of these two things will inspire business to reinvest albeit reluctantly. It’s a huge hill to climb, I’m not even sure if we have the will to begin the journey. But Most solutions start with small steps.

Govt. just don’t get it the damage BEE is doing to SA. Old businesses are voluntary closing down or moving equipment to another country after threats of not complying with BEE. Some are businesses started way back in the 40″s and 50″s

Business is already leading as we have an economy run by proxy on so many fronts:
-private healthcare;
-private education;
-private infrastructure building (read municipal engineering service contributions etc);
-private security;
-private nation-building;
-private sports representation;
-etc etc

Henry Ford said:
“Coming together is a beginning, staying together is progress, and working together is success.
If you think you can do a thing or think you can’t do a thing, you’re right.
Failure is simply the opportunity to begin again, this time more intelligently”.
We need to give our President a chance. We need to ALL believe in South Africa again.

The problem we have with using Fords quotation as a yardstick is that both Mbeki and Zuma believed that they could make a difference to our economy – job creations and ease of doing business were catchwords – problem is they have no monitoring metrics and no milestones of any consequence by which they can be measured. Wonder if the NPI even exists these days

Seems that the NPI does not exist any longer. WC Gov. has a link to it that is obsolete. Used to enjoy those discussions.

Like the Zimbabweans believed in their country?
Did them a lot of good.

Wasted years? No, just 25 years of a democratically elected ANC government, recently endorsed by the forward thinking people of SA. Nothing wrong in SA according to the majority if you can win with such a margin.

I wish we can stop calling reverse-racism “transformation” and stop pretending like state capture is over. Anyone who thinks we have “emerged” from that is demented and misguided. Perhaps Mr Mohale is advising Multichoice – both parties appear more interested in politics than business.

…must lead SA’s “rehabilitation”

The word “Rehabilitation” DOES NOT fit into SA’s strategic and long term future:

SA is in long-term structural decline post colonial period. The “last domino” has fallen in 1994. When a country that was previously over-developed (in comparison to other African countries the past century or longer) and now merely reverting back to “mean average” post-colonialisation, and also driven by change in demographics trend.

One cannot expect SA to remain Eurocentric. The (continental) trend is towards “Africanacity” 😉

Hence in this trend, WHERE does this rehabilitation fits in?? “Rehab” means to improve or return to normal functioning.

I don’t think you can say SA is mean reverting. Things wouldn’t be this way if we weren’t controlled by a group of socialist extremists dedicated to their jurassic ideology. South Africa has been subverted and is not reverting. The trend without the governors is upward. Perhaps this is the point of frustration held by so many commentators.
And we all know about Fanon and his philosophy. And the ANC implementation, the NDR.
What do you think giving the locomotive contract to China was about. The last thing the socialists want to do is encourage economic growth. That would would be anathema to what they are about (and their beloved NDR), which is treachery, destruction and pillage.
South Africans should be taking up arms against these traitors, not voting them back into power time and time again.

Patrick, I appeal to you as a younger person to start and lead a campaign against the badmouthing of business in South Africa. Bell Pottinger was forced to close because of its part in promoting State Capture but,sadly,it has left us with an ongoing expression which many people seem to have fallen into the habit of using whenever they refer to business and businesspeople – White Monopoly Capital – as if all capital were “White” and all business monopolistic.
The use of the term, and similar ones, does great harm to South Africa’s image in the minds of investors. Those who use it so freely apparently do not see the connection between investment and jobs.
A campaign to get people to use favourable language when they speak of business is desperately needed.
Over to you.

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