KHAYA SITHOLE: The business of collaboration and solidarity

Over the past few weeks business and political leaders have taken important steps towards rescuing what little hope remains of the SA promise.

Business leaders, who have patiently bided their time hoping the management of the country’s economy would miraculously improve, finally took up arms and formed a solidarity partnership with the state to address the most pressing issues affecting the economy.

In July more than 115 CEOs of major companies signed a pledge to provide resources and capacity to the state to address challenges in key economic sectors, including energy, rail and logistics. The energy crisis had already led to the creation of a partnership with the government aimed at providing technical and financial skills to address some elements of the energy crisis. 

This partnership was formulated on the back of the obvious reality that state resources remain constrained, and prioritisation remains a persistent tension point. Providing additional resources is therefore expected to alleviate the resource constraints and enable faster execution. Unfortunately, the commitment to additional resources does not always come with a commitment to faster policy measures.

Part of the problem is the truncated nature of policy formulation, which requires consultations that are notoriously slow to roll out. In instances where existing policy measures are an impediment to a faster rollout of critical initiatives the provision of additional resources does nothing more than provide a larger kitty of additional resources that then sit idle. 

The policy constraints relating to the energy crisis — from licensing and environmental approvals to implementing processes already agreed at various structures — mirror the red tape hurdles associated with the state. In 2019 the government committed to unbundling Eskom into three entities as a process of deepening focus and improving efficiencies in the electricity value chain.

Four years later, only one of the new entities has moved towards implementation. That leaves the lingering impression that the sense of urgency that one expects in the middle of an energy crisis is not matched by the conduct of the politicians and bureaucrats. 

When small businesses complained about the impediments inherent in running a business the state responded last year by appointing Sipho Nkosi to lead the process of identification and abolition of bottlenecks across the system. More than a year later, no-one has accused the state of having done much to address the red tape problem with any measure of success. 

The involvement of business leaders in the deliberation room may provide some diverse insights into the business dimensions of the state’s economic modelling, but this requires business leaders themselves to have an appreciation of the policy limitations already in place.

Ideas that are at odds with the agreed policy orientation of the government will create the type of hysteria recently witnessed in the conversations about Transnet’s partnership with ICTSI, and the SAA privatisation. Given the elevated focus on avoiding alienating political partners ahead of a general election the government will be keen to avoid its relationship with business being interpreted as a proxy for bypassing the ANC’s agreed policy directives.

What makes the partnership uniquely unorthodox is that if it works as well as envisaged it will result in positive spin-offs for the economy and serve to validate the incumbent government and its policies. If success is achieved in spite of the limitations and problems inherent in the current policy framework, it will diminish the possibility of wholesale revisions to the country’s economic policy pillars.

Given that the partnership with business will be temporary in nature, failure to use the opportunity to tackle policy constraints means that just a few blocks down the line the issues inherent in the impasse will simply be revived in another form. One hopes the next batch of CEOs will retain the same appetite for collaboration.

• Sithole (@coruscakhaya) is an accountant, academic and activist.