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OPINION
Can supine CEOs save South Africa?
William Saunderson-Meyer |
17 June 2023
William Saunderson-Meyer writes on big business’s initiative to try and fix what the ANC has broken
JAUNDICED EYE
The electorate won’t do it. The government can’t do it. Now business is going to have a whirl.
Last week President Cyril Ramaphosa and some of his ministers met with business leaders, following months of increasingly strident corporate warnings that South Africa was headed towards collapse. It was agreed that business would help rehabilitate three areas: energy — primarily Eskom, where it is already involved — transport and logistics, and the criminal justice system.
It is understandable in a country where radical talk of expropriation without compensation and nationalisation is not just hot air, business has always been skittish of drawing fire by entering the political arena. That it has done so now — the meeting took place at the behest of Business Leadership South Africa (BLSA) — shows how grave the situation is.
From the government side, too, there would have been wariness. There is a deep antipathy on the part of the African National Congress towards anything smacking of private enterprise. That the government agreed to the meeting and setting up the work streams is the other compelling indication of the peril we are in.
Business’s motivation is obvious. It’s taking a financial drubbing as the cost of power and water outages, collapsed rail and road links, and rampant crime — including ruthless criminal syndicates now firmly embedded in construction and many product supply chains — is reflected in bottom lines that are bleeding red ink.
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To survive, never mind flourish, it has to make these basic parts of the economy work. In the old South African tradition of ’n boer maak ’n plan, the CEOs are ready to do exactly that: to roll up their sleeves to mobilise private sector expertise, as well as provide funding above and beyond what their companies already stump up in tax.
It may be that some of the CEOs hope that somewhere down the line there will be other tangible advantages — business opportunities, the ear of the president, even a modicum of respect — flowing from the new relationship. If so, they should stow their naïveté at the door.
While this should be a win-win situation, for that to happen, the CEOs will have to be as hard-nosed in their approach to the government as they would be in any corporate deal-making among themselves. If not, the ANC will simply pick their brains (and their pockets), take credit for any progress, and then send the CEOs packing with a pat on the back and a flea in the ear.
Business should keep in mind that aside from the ruling party’s ideological antipathy, the ANC’s hostility has a practical aspect to it. In South Africa, it’s a duel between private enterprise versus criminal enterprise.
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It is a fable that state looting is a phenomenon of the Jacob Zuma years, what Ramaphosa once described as the “nine lost years”. It preceded Zuma and continues under Ramaphosa — albeit less brazenly and more decorously — but in not markedly shrunk volumes.
How could it be otherwise? The ANC is a massive criminal operation. Both it and its talentless cadres rely for survival on the money that is siphoned from the budgets of government departments and diverted through front companies.
This causes what, charitably, one could call severe cognitive dissonance in the ANC. Or, less charitably, shameless hypocrisy.
Last week, the head of the ANC Integrity Commission, Reverend Frank Chikane, announced yet another attempt at moral renewal within the party. “Criminals are running us,” he told a media briefing. “In terms of Eskom, for instance, we have darkness because criminals are holding us to ransom. I’m not ready to be governed by criminals and I’m not ready to be run by syndicates.”
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These fighting words came on the same day that Chikane’s ultimate boss, Cyril Ramaphosa, was chiding the CEOs leaders for funding a private investigation into those very same criminal syndicates at Eskom. The power utility’s CEO André de Ruyter, fired for blowing the lid on the syndicates during a no-holds-barred television interview, had gone cap in hand to BLSA after failing to stir into action the police and the priority-crime Hawks.
Ramaphosa said that BLSA’s financial support for the gathering of“unauthorised” intelligence, had damaged trust between the government and the corporate sector. He did not elaborate on why or from whom BLSA should seek “authorisation”, aside from its board. Maybe the ANC Integrity Commission?
Ramaphosa’s words indicate the biggest problem that organised business is going to have in its new relationship with a disorganised government. They have to comprehend that the ANC is not looking for a partner; it’s looking for a lackey.
On several occasions, both Ramaphosa and his ministers have told CEOs not to express public criticisms. Reportedly, at a meeting between the parties in April, Ramaphosa said that while he did not expect business leaders to be “praise singers”, it was unpatriotic of them to criticise the government publicly, especially overseas.
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The Sunday Times, citing anonymous sources, said that Ramaphosa outlined clearly to the business leaders what the parameters of any new relationship would be. Business and government were going to be “working together”, said Ramaphosa. The CEOs needed to disabuse themselves of the belief that they would be “assisting government”, which would imply that his administration was incompetent.
Another signal of there being a disparity in commitment comes from the composition of the two groups. The private sector sent a high-powered group. The state sector, with some key omissions, less so.
Organised business was represented by the CEOs of BLSA and Business Unity SA. None of the black business forums appears to have been present, presumably because they either believe that the government is doing just fine or because it was a meeting of limited use in terms of further rent-seeking.
Also in the business delegation were Nedbank CEO Mike Brown, Standard Bank CEO Lungisa Fuzile, Sanlam CEO Paul Hanratty, Sibanye-Stillwater CEO Neil Froneman, Toyota CEO Andrew Kirby, Remgro CEO Jannie Durand, Rothschild SA executive chair Martin Kingston, Sasol CEO Fleetwood Grobler, and Nolitha Fakude, chair of the Minerals Council and on the board of Anglo American.
Some, like Adrian Gore, the irrepressibly upbeat CEO of Discovery and head of Business4SA — the voluntary collective set up during the pandemic to work with the government to address economic and social development bottlenecks — have always had an instinctively conciliatory approach to government. Fuzile is a former director-general of the Treasury and a natural Ramaphosa supporter.
Others, while similarly conservative and cautious, have become considerably more outspoken in recent months.
Brown, who is about to retire, warned that infrastructural failure was paralysing business and that “urgent and decisive leadership and action” were needed from the government. Durand cautioned against the “clear risk” to trade relations and exports of the government cosying up to Russia.
Froneman said investors are “very negatively disposed” towards South Africa because “they’ve lost faith and lost trust in the government”. Kirby noted that vehicle manufacturing would slow dramatically until South Africa “stops shooting itself in the foot”.
Fakude has been particularly forthright. In a December letter to the Transnet board, she castigated the state-owned entity’s ‘tragic decline” and called for Transnet CEO Portia Derby and Transnet Freight Rail CEO Sizakele Mzimela to be fired.
Ramaphosa’s team was somewhat lacklustre. Unsurprisingly, neither Derby nor Mzimela attended the CEO/Ramaphosa meeting. Transnet, the key component of the one work stream, was instead represented by the head of its property division.
While the energy and logistics sectors were well represented ministerially, not so much the justice and law enforcement portfolios. Electricity Minister Kgosientsho Ramokgopa, Trade, Industry & Competition Minister Ebrahim Patel, Finance Minister Enoch Godongwana, Minerals & Energy Minister Gwede Mantashe, Public Enterprises Minister Pravin Gordhan, and Transport Minister Sindisiwe Chikunga, were all there physically, if not mentally. Neither Justice Minister Ronald Lamola nor Police Minister Bheki Cele attended, though Cele sent his deputy.
Also, the country’s Deputy President, Paul Matshatile, continues to be excluded from the doings of the inner circle. Instead, Ramaphosa was accompanied by Minister in the Presidency Khumbudzo Ntshavheni, who nowadays spends so much time popping off to Russia for mysterious “security consultations”, that she might as well join Putin’s cabinet.
Ramaphosa harps on endlessly about the critical necessity of social compacts. But as this meeting shows, in reality, his interaction with organised business is very different from how he engages with organised labour. The latter is between respectful equals; in contrast, he appears to see the business leaders as gullible pawns who will do his bidding.
If the CEOs are to succeed in their objectives, they must prove Ramaphosa mistaken. They must be clear about what they want in return for what they offer.
Follow WSM on Twitter @TheJaundicedEye
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