Pityana: Ramaphosa must endorse Treasury proposals ‘unambiguously’

Busa president warns that SA is facing an unprecedented economic crisis, the longest downswing since 1945.
Sipho Pityana, speaking at the Business Economic Indaba in Sandton on Tuesday. Image: Moneyweb

Business Unity South Africa (Busa) President Sipho Pityana chose not to criticise government failures at the organisation’s annual Business Economic Indaba in Sandton on Tuesday. However, he was frank in his call for President Cyril Ramaphosa to back National Treasury and Finance Minister Tito Mboweni’s economic reform proposals.

Addressing 500 captains of industry and government leaders, Pityana said it’s no longer enough for government to acknowledge the economic crisis; urgent action is now required.

Watch: Pityana’s call for action

“Government urgently needs to pronounce far-reaching structural economic reforms that focus on sustainable inclusive growth and a fiscal policy that is aimed at reducing public debt, while simultaneously reducing public spending,” he added.

“We must do all we can to stave off a sovereign rating downgrade.

“A failure to do this will see our economy contract further, more jobs lost and an accelerated flight of skills and investment. This is a path we must avoid at all costs, as with it might come sociopolitical instability,” he warned.

Pityana said South Africa desperately needs an action-oriented blueprint, focusing on key strategic sectors and interventions to revive the economy.

“The Treasury proposals are an important start, but they need unambiguous endorsement from the president and government, and must be finalised urgently.

“We need a single government voice on this, not a debating society reminiscent of the state capture years,” he added.

“The public display of divisions does the country a great disservice.”

First released for public comment in August last year, the Treasury’s proposed economic blueprint calls for reforms in the energy, telecommunications and transport industries aimed at boosting SA’s competitiveness and economic growth. Other reforms include cutting the government wage bill and state debt as well as greater support for small business and sectors such as agriculture and tourism.

The plan has received the backing of business and other quarters, but labour has voiced strong opposition to it. With proposed reforms also involving the restructure of state-owned enterprises such Eskom and Transnet, labour has raised fears of job losses.

Read: Mboweni’s plan for saving SA faces labour opposition

The Treasury, however, claims the plan could create a million new jobs in the broader economy and boost GDP growth to 3%. Just last week, Mboweni took to Twitter to express frustration in several tweets that if structural economic reforms were not undertaken it would “game over” for the SA.

Pityana, one of the first vocal critics of Jacob Zuma during his presidency, expressed the full confidence of Busa in Ramaphosa’s leadership. However, he warned that the president and government need to be decisive and agile in dealing with the country’s economic woes.

Beware ‘leadership by consensus’

“As business, we welcome President Ramaphosa’s open and inclusive leadership style. We would, however, caution against an overemphasis on leadership by consensus, for this can condemn our nation to move at the pace of the slowest and the most conservative – or worse still, being vetoed by an unaccountable lot,” he said.

He warned that South Africa “is now facing an unprecedented economic crisis” – the longest economic downswing since 1945. He said the country had an average economic growth rate of 1.5% over the last decade, compared with over 4% in other emerging economies. The World Bank has forecast below 1% GDP growth for 2020. 

Pityana is however not without optimism: “We are a country that is capable of going back to our winning ways after the disastrously corrosive and damaging state capture years.

“Need we remind ourselves that we once upon a time trebled the size of our economy after 1994?

“We saw economic growth levels that exceeded 5%. We experienced an era that saw the fastest growth of the black middle class, at the same time that we rolled out massive social security programmes that saw us cushion the poor as we gradually brought them into the net of a growing economy.”

The single biggest concern for business according to Pityana? The power supply crisis.

Read: Finally, a credible plan to fix Eskom
Eskom board chairman resigns – presidency 

He also raised concerns around the recent resignation of Eskom Chair Jabu Mabuza and moves to transfer responsibility of Eskom out of the Department of Public Enterprises.

“We take no comfort from the recent resignation of the chair of Eskom,” he said. “We need to be informed what happened to the restructuring recommendations made by both the board and the presidential technical task team.”

He also questioned how governance concerns raised by the board with Parliament are going to be addressed.

“We are deeply concerned by suggestions that leadership appointment considerations at this critical stage might be caught up in ANC factional battles that have nothing to do with national interests.

“We must also guard against using a critical matter like the Eskom crisis as a political football, as evidenced by the attack on [Public Enterprises] Minister Pravin Gordhan and the new-found passion in some quarters for moving Eskom out of the Public Enterprises portfolio.”

Listen to Nompu Siziba’s interview with Sipho Pityana:
 

 
 

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First 3 months of 2019 lost 267k jobs, just short of 90k per month. That trend is still going, that means 1 000 000+ jobs lost in 2019. Government can only make good friendly policies, but every new policy document is unfriendly. It is not just SOE’s or Escom, it is every document coming from government that is so so unfriendly to the business sector. Politicians are not business friendly, they understand very little of the hardship and long hours of business, all their talk is always a kind of self inflated sense of self importance, they care only about themselves.
Their language is mostly against business, whenever they speak about jobs I wonder if they understand how difficult it is for the businesses to comply to all their unfriendly policies.

100% spot on. We have a state that has (way too high) interferance into the private sector on many spheres.

Strange how everyone thinks we can fix SA while the socialist status quo remains?

Our leader is the very person protecting the socialist agenda.

Wake up and smell the coffee. He can not fix it.

Nothing can’t be fixed…., but it has to be totally broken. Deliberately or otherwise…

Yes sure. Look at Zimbabwe. 20 years on and still not fixed. Once broken, always broken. It is not in the ANC government’s capability to fix anything.

When Ramaphosa looked out of the window of that train he was on, that train that did not move for 3 hours, he said nobody was responsible for the Prasa and Eskom disasters. He said that “accountability lies with the collective.”

This is the reality of the ruling party and the president. Nobody is responsible for anything. Nobody is in control. The collective is in control. That means you and I, we are in control. We can describe the president’s accountability mathematically. When we divide the required accountability by the collective, then the president bears one 60 millionths of the accountability. This is as close to zero we can get.

We do not have an active president, nor do we have a government. We only have a loose affiliation of looters who structure themselves in an organisation that gives them access to the piggy-bank. This is a free-for-all, a feeding-frenzy, dressed up as a constitutional democracy with human rights, rule of law and a market economy. Only the most uninformed and naive will believe this farce. We are a failed state, with an impotent gang leader as president.

Exactly! The only persons who ever benefit under such a system are the most unscrupulous and egregious looters. A sure sign that someone falls into this category is if they claim to be acting for the benefit of “the people”, or “the poor”. The people and the poor are furthest from their minds.

Please (re-)read Ayn Rand’s Atlas Shrugged. It is unbelievable how accurately a book published in 1957 describes South Africa in 2020.

In times like this we need a leader not a collective.
Trump is by no means the epitome but as a leader he has turned the American economy around. Not without imperfections but overall a resounding improvement. We need a leader like a Churchill or even a Thatcher who takes no nonsense and acts jn the interest of the country!

… If it took 34 year old Thomas Sankara 4 years to turn around things in Burkina Faso, why cant CR do it here. He needs to show true leadership… that is what South Africa needs.

Ag shame, no one wants to be called a dog of White (or is it Chinese) Monopoly Capital.

So the unions are holding the country at ransom – they have much political influence and little political accountability.

It is time that the unions split from the ANC. It is for pres. CR to lay down the law to them – either the unions except major changes and job losses, or go their own way.

Also, comrade Tito Mboweni should get up from behind his grand piano and actively campaign to get his positive ideas on the economy across.

The ANC old guard has grown fat and complacent on their BEE shares. Pres CR is already tired and the year have not even started yet.

Strange to think that half the ruling party is destabilizing the country that it rules.

Whilst the less bad half, instead of kicking the bad guys out, are pleading for “unity”.

End of comments.

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