ARRIE RAUTENBACH: Election gives business the chance to build on government engagement

A well-known political analyst once made a profound remark in a room full of predominantly American business leaders who had gathered in a Johannesburg country club to listen to a pre-election briefing.

“It is not the business strategy that will determine the growth and success of your companies, it is the political strategies of the government of the day,” he said, to the consternation of those who were in the room. He may have exaggerated somewhat, but he managed to drive an important point across.

We find ourselves yet again at a critical political juncture, not just in SA but globally. This year is a significant political one, with about 2-billion people in about 50 countries expected to go to the polls to elect leaders, whose political decisions will have a profound impact on business decision-making.

South Africans, too, are having their turn in the ballot box, in a pivotal election for this country for several reasons. It’s been 30 years since the dawn of democracy and for the first time, the hegemony of the ruling ANC is facing an existential threat with resultant uncertainty about how the national and provincial governments will be formed after the elections. Business is, as to be expected, anticipating these elections with trepidation and interest. For the business community, the key question is: where to from here, and what role should this community be playing over the next 30 years to place the country on a powerful growth trajectory?

Three areas deserve priority status on the agenda of business. It is maintaining a strong, proactive state-business relationship that is agnostic of political party leadership. For the banking sector, it is also rebuilding the confidence and trust that has been eroded by a series of banking failures abroad, and here on our shores by a populist narrative that has sought to portray banks as resistant to transformation. It is furthermore making a socially responsive approach core to business.

The global banking sector has faced a significant erosion of trust, and perceived indifference to societal needs. Rebuilding this trust is crucial for banks to play a meaningful role in supporting democracy and socioeconomic development. Trust in banks is essential for economic stability, as it influences the willingness of individuals and businesses to engage in financial transactions, invest, and save. When trust is compromised, the very foundation of economic activity is threatened, leading to broader societal repercussions.

Diverse communities

In SA, rebuilding trust in the banking sector is particularly pressing. The country has faced unique challenges, including corruption and mismanagement within public and private sectors. To regain public confidence, SA banks must prioritise transparency, accountability and ethical governance. By demonstrating a genuine commitment to these principles, banks can reinforce their role as pillars of economic stability and agents of positive change. This involves not only adhering to regulatory standards but also actively participating in initiatives that promote financial inclusion and social justice, thus aligning their operations with the broader goals of democracy and societal development.

Globally, banks must adopt a more customer-centric approach, ensuring that their services and products meet the needs of diverse communities. This includes investing in digital innovation to enhance accessibility and convenience, while also addressing data security and privacy concerns. By supporting a culture of trust and integrity, banks can restore their reputation and contribute to the sustainable development of the societies they serve. Ultimately, a trusted banking sector is indispensable for nurturing economic resilience, ensuring social cohesion, and supporting the democratic process.

While much has been written about the relationship between business and government in the SA context, as well as the highs and lows in the interactions between these two spheres over the past few decades, there is consensus that tensions have thawed. This relationship has now largely become much more co-operative in recent years, with positive outcomes for efforts seeking to address the key challenges that impede socioeconomic growth and development. The recent signing of the National Health Insurance Bill is however, likely to present a formidable test to this theory of a thawing of relations.

Yet, it is generally acknowledged that business has featured prominently in SA’s transitions and that it has played an equally important role in advancing nation-building initiatives since the 1994 transition. The Covid-19 outbreak, one of the biggest challenges that the country has faced in recent history, caused business to play an instrumental role in mitigating the worst effects of the pandemic. Business again played a fundamental role in supporting Operation Vulindlela’s quest to urgently implement structural reforms aimed at addressing bottlenecks and stimulate much-needed economic growth.

Society relationship

With this milestone election, and uncertainty running high, business is predictably anxious about what the future holds, and how this expected transition will affect public policy and the business environment. It is a chance for business to invest in and maintain a strategy of proactive and constructive engagement with the government, based on clear objectives that further the interests of both partners. It is not the time to dither and stand back.

The relationship between business and society is equally important, not least because we should realistically expect that the lack of confidence and trust that we see expressed towards state institutions could equally be directed to the private sector. Our societies are in crisis. Just recently, Stats SA released its Quarterly Labour Force Survey, which shows that SA’s official unemployment rate rose to 32.9% in the first quarter of the year.

This news compounds the hardships that people face, including a cost-of-living crisis, poverty, inequality and inadequate access to basic services such as decent education and health.

Furthermore, we are facing a climate crisis, which needs us to be much more intentional about finding solutions, and while so doing, guard against increasing socioeconomic vulnerabilities and inequalities. It’s imperative that we quickly get to a point where, as business leaders, we treat inclusivity as business critical, and not a remedial solution.

While transitions may naturally induce anxiety and uncertainty, the opportunities that they present should not be lost on us.

• Rautenbach is CEO of Absa Group.