Fin24

Business warns ANC: Be clear

2012-07-01 16:02

Johannesburg - Business leaders attending the ANC’s policy conference this week appealed for certainty and warned that lack of clarity could lead to a plunge in business confidence and lack of investment in the economy.

As the pool of R1.2 trillion private-sector deposits rises and the ANC policy conference defers concrete policy details to its Mangaung conference in December, South African business is calling for certainty.

This happened against the backdrop of much horse-trading on the tone, nature and naming of the ruling party’s much touted “second transition” document.

By the end of the conference on Friday, consensus was apparently arrived at and symbolised by the renaming of the contentious document, which will now be called The Second Phase of the Transition document.

On the fringes of the often heated debate, business leaders warned that corporate deposits are large and stand at almost R1.2 trillion - with households contributing R568bn, corporations R154bn, and insurers and pensions yielding R152bn to these retained earnings.

Business leaders said that for these amounts of money to find their way into the economy, there needed to be clear policies, programmes and projects in which to invest.

Corporate leaders stressed the need for urgency, as investment funds could find themselves avenues for growth elsewhere on the African continent otherwise.

These views echoed concerns expressed earlier this year by all three of the ratings agencies involved in the international credit rating of South Africa - Moody’s, Fitch and Standard & Poor’s.

These have all revised South Africa’s credit rating downwards, citing low growth, unemployment and policy uncertainty.

Black Business Council leader Sandile Zungu said that his constituency welcomed the general recognition that the state needs to play a part in the economy.

He said that the private sector should increase its investment levels and assist the state to meet its socio-economic goals.

“The cautious approach of the private sector is understandable. Government needs to provide clarity and announce an implementation plan. It must announce a slew of projects that offer reasonable returns to private-sector investors,” said Zungu.

“These must not be wishy-washy plans but well thought through projects that have been subjected to rigorous research and planning,” he said.

Bheki Sibiya, the chief executive of the South African Chamber of Mines, told City Press the chamber would soon be sitting down with the ANC to gain a deeper understanding of the exact implications of the resolutions of the policy conference.

He said: “We will be going into bilateral discussions about the resolutions so we can digest the meaning of these for businesses.”

According to Sibiya, business represented by the chamber understood the need for change.

“There is a need for change and transformation in the economy but this must not be at the expense of jobs or growth,”he said.

Leaders of South African banks, telecoms companies and mining companies were highly visible at the conference in Midrand, Gauteng, this week.

They indicated that the private sector would only partner government in its planned R845bn infrastructure spending when government provides clarity on its approach to South Africa’s key economic challenges.

This week, business representatives complained that the ANC discussion document on economic transformation was not yet concrete, but a discussion of the economic growth options the country faces.

They said clarity was sorely needed and pointed to examples of regulatory clarity provided by Malaysia, Singapore and Botswana in their economic transformation programmes.

An often-cited example is that of Malaysia, which specifically targets a gross national income of $523bn (R4.2 trillion) by 2020 – and has planned for a per capita income rise from $6 700 in 2010 to at least $15 000 in the same time period.

This is concretely explained in their economic transformation plan, which specifically explains what the private sector must achieve. Malaysia has announced 19 key projects earmarked for private-sector investment.

This week, debate at the ANC conference pivoted around the discussion document titled The Second Transition – Building a National Democratic Society and the Balance of Forces in 2012.

This document was prepared by the ANC policy unit and endorsed by the party’s national executive committee.

The document was submitted as a discussion document at the national policy conference this week.

It was drafted by leading ANC figures, Gauteng provincial secretary David Makhura, Northern Cape secretary Zamani Saul and ANC head of political education Tony Yengeni, under the supervision of Jeff Radebe, the ANC’s head of policy.

This committee then distributed the document to ANC branches nationwide for discussion and debate.

The document contains suggestions about boosting job creation through infrastructure development and the improvement of South Africa’s manufacturing base.

It envisages increasing investment levels throughout the economy by inducing more private-sector participation in joint public-private sector projects.

The document asserts that through localising the manufacturing of products in the mining industry, South Africa will increase productivity, boost GDP and reduce unemployment.

But business people assert that the proposals are vague and have expressed concern that the discussions on the direction of the economy were being linked to President Jacob Zuma’s bid for a second term in office.

At a press conference on Thursday, Radebe said the document had been considered on its own merits and that it was not related to Zuma’s re-election bid.

 

Comments
  • christelle.james.7 - 2012-07-01 16:28

    “These must not be wishy-washy plans but well thought through projects that have been subjected to rigorous research and planning,” Zungu said. We have more and more black leaders - politically and in the business sector realising and understanding that the road to transformation is not "wishy-washy". Thank you for that - and then Sibya goes on saying that the mining sector understand the need for change, but it cannot happen at the expense of jobs and growth.

      Glyn - 2012-07-02 11:42

      It is about time that the business community TOLD the anc to get it's investment policies into good order. Saying that "the need for change is necessary" is just another cliche when nobody specifies the change that is needed. Yes. we DO need change and that is to vote the anc OUT! 18 years in power and they are directing the country DOWN! Vote DA! That simple action will lead to an enormous economic and social advantage! That is leverage!

  • pieriewaaier.zooms - 2012-07-01 17:32

    But it is high time for the private sector through its representative organizations to become much more active in the national debate and not just those aligned to the ANC. The time has come where they have to grab the initiative & provide clear leadership and to make their ideas and concerns public on an on-going basis. The after-the-fact-comments serve no purpose at all. Why don't the private sector take the initiative & organize a national conference for starters to state its concerns clearly and provide meaningful direction & programmes in terms of the requirements of optimal economic growth? A clear vision of 'prosperity for all through growth'! Fact is we need to see & hear more from the private sector very quickly. All we hear daily are the warped economic arguments of politicians most of whom were schooled in centralist marxist ideology and the more this kind of idiocy is preached from the pulpit of the ANC's "broad church" the more people especially the young start taking it as the gospel truth. Although the efforts of the Chamber of Mines must be recognised fact is that we require the private sector to COME TOGETHER NOW & speak from one podium in clear language & in one voice; not the Chamber, Sacci, AHI, JCCI, etc all doing their own thing separately. Just confront the issues now and put your agenda on the national table once and for all. This is I dare say, an initiative all loyal but very concerned South Africans would applaud and support! The sooner the better!!

      pieriewaaier.zooms - 2012-07-01 19:08

      @ William: Look I hear & understand you. The frustration of businessmen is mindblowing and yes, we pay our taxes, etc. But we have serious concerns about which we have opinions and solutions (i.e. your idea of broadbased education; I have different ideas and you & I know there are many opinions and solutions being discussed in business circles). We also belong to representative associations and organisations for which we pay. So let them take the initiative on our behalf together as one and confront this lunacy on our behalf now asap. We did it with PWBotha @ The Carlton once & he ignored it at his own peril & that of the nation. We can & MUST do it again, now before it's too late!. Look, I've worked and lived in Europe for many years & we came back. This is where we want to be & don't entertain 'other green pastures' as an option and I daresay, the majority of business people I know think this way. It's good for the younger generation to go overseas & get that cutting-edge international exposure and experience but it seems, if they had an option, they would have preferred to do it here and many of then do in fact return. It seems to me, if prospects were better for your busines, so would you? So, we have got to do something and who knows, perhaps, even your business may benefit. But then, you may find yourself elsewhere and good luck to you. Not easy & won't be for the next decade, believe me.

      hugh.robinson.56 - 2012-07-01 20:00

      Yes I aree to a point but at the same time they must not bend like reeds in the wind. Business acepted BEE and EE at the peril of country. The Rand Merchant Bank properties insisted I went BEE I closed my company and retired. The problem is that these CEO's of corporates are in truth employees who are in it to protect their butts and look good but they tell us small businesses how to run our businesses. These are the people who retire with golden hand shakes leaving us who use our own capital to build a business to shovel the Sh1T they leave behind. I say it is about time we stand up and be counted.

      pieriewaaier.zooms - 2012-07-01 20:18

      William, businesses operate, grow, make profits, etc in apolitical environment which impacts the national economic prospects, etc through government policy & strategy. When that political risk gets too high & threatens the economic climate, then organised business must do something and can do something. To sit back without speaking its mind and being heard clearly, is just in my opinion no option because the 'collateral fatalities' (if you will) is just too ghastly to comtemplate. We do not have that luxury nor can we just sit back: We can organise around a cause (E-tolling?)and hopefully,achieve a turnaround from that cliff. I hear your concerns ore the 'masses of today'. Fact is they just hear one story all the time and yes, you are correct, it's a formidable & huge task, but private sector must start to argue its points publicly and bring these alternatives to the 'masses'. Very difficult but I see no other way out. So, perhaps self-preservation elsewhere is an option for you; for many & I daresay the majority of businesses that's not an option. I don't understand your point about the finances and funding; God Allmighty, I am not suggesting we give more money to the government, please understand. Don't sit back William; organise to do something asap. The ANC knows it doesn't have the answer but will never admit to it. Private sector would do it a huge favour to engage them, believe me. And good luck!

      jango.za - 2012-08-07 14:19

      @Pieriewaaier. I like you noble sentiments but totally disagree with your approach. I have moved businesses offshore, and depending on your sector vertical (mine is ICT), I would advise any South African entrepreneur to do the same. We are in a global village, and for trading and operating benefits, SA rates very poorly even against some if it's African peers. Do not confuse those coming back to SA, and I know of some too, for "beautiful Cape Town" purposes with those coming back to develop new business onshore. The warmth of SA people, our outdoor living, and broader life-knowledge does attract - always. SA is in one's blood, but that has zero to do with a favorable business climate and operating conditions. Let's face it: tax is high, BEE is difficult to administrate (and no one likes forced partners, our competitors around the globe don't have this challenge), policy making is non-existent, there is a chronic skills dearth for high-end jobs, and high crime has a negative impact on employee performances. Now if you have time to work through these challenges - good for you. As an entrepreneur, my time and tax money goes to getting all stakeholders appropriate returns. SA is simply too low on the economic ease-of-doing-business index, and our lawmakers have proven not to be competent enough to change this. The 10 years you refer to - is a lifetime in a business. An entrepreneur may have an exit strategy for new ventures long before then. So good luck, but I agree with WB9.

  • sannie.maseko - 2012-07-01 17:35

    Business must not come up with that nonsense, instead they should warn companies that does not want to transform of threatening investors. Food security my foot, the land will be taken back and given to the majority.

      pieriewaaier.zooms - 2012-07-01 17:52

      Dear Sannie, I am trying my very best to be civil in my response but it is quite clear you have no clue what you are talking about. Your ill-informed blabberings speaks volumes of you and those that support your death wish through painful hunger and unimagineable poverty as we see to the north in Africa. Where is mention made of food security in the report? Nowhere but your silly statement says it all: Take back the land and you will taste the lack of food security in your belly, the bellies of your kids and grandchildren. Don't be silly. You are unpatriotic and disloyal to ALL South Africans!

      Jennifer - 2012-07-01 19:13

      Sannie, if government makes it hard for us to live and run business here, we will have to take business elsewhere where we are safer. We love this country and have hope or we would have left in 94 but we will take the money we make and we will take the jobs we create and then in the end after you have killed the farmers and the school books are dumped, how will you feed and educate your children... If you wonder what a world without us is like, just take a look at the congo and zimbabwe and rwanda and somalia because that is the road you are speeding down. And when the destructive lifestyles, that our esteemed leaders seem to encourage, change everything, we will come back. This is not about land for the majority, Zuma couldn't care less about the majority, he will tell you whatever it takes to get your vote. He doesn't deserve your vote.

      russell.w.wright.5 - 2012-07-02 07:06

      What would the majority eat then Sani?

      Glyn - 2012-07-02 11:57

      @Sannie You got to pep up on your math skills (second attempt) Here's an exercise for you. Go check the latest POPULATION FIGURES for SA, then find the total PER CAPITA INCOME of South Africa. Then divide that by the TOTAL POPULATION and see how much each one will get. I take a bet your income goes down a lot. So rather than pushing the anc's "communistic redistribution" work on increasing the total income while only having as many children as you can afford and then ALL the people will get more. Much more!

      mike.burrows.37 - 2012-07-02 13:02

      I may not have the vision or insight that the majority of the voters in this country have so can somebody please explain to me how the majority see and understand Land Redistribution. Take out the argument of food supply and I still cannot see how this will benefit the majority of the people who live in Soweto, Alex and the like. Will these millions of people all be given a piece of farm land and then all move back to the farming areas to farm there bit of land and make their living from the land or will they then each have a piece of land but continue to live where they are under the same conditions but be the proud owner of a piece of unused land. Will the land only be redistributed to a small minority who already live in the rural areas and hence only a very small minority will benefit from this. Will all the houses in the so call white areas be taken back and dived up almost the majority and everybody will live happily ever after in Sandton Somebody please explain this or is this just a button that the ruling party keep pushing to get votes. Please help

  • sakkie.prinsloo.35 - 2012-07-01 17:52

    sannie.maseko. Give the "Land Back' and see how we starve. You dont even grow your own tomatos.!!!!

  • nick.b.hanley - 2012-07-01 17:55

    Can someone confirm that Tony Yengeni, the drunk driving convicted fraudster, is now part of the panel creating the policy that is to take our country forward? One couldn't make this stuff up....

      pieriewaaier.zooms - 2012-07-01 18:11

      yep, he is and he said so much at the ANC conference as well. It's heart wrenchingly sad that this is the calibre of professionals the ANC has to rely upon for policy formulation. But have a look at the other names:Makhura (ANG Gauteng provincial secretary who has a lot to say about cadre training); Zamani Saul (Ditto of Northern Cape - never heard of him) and Jeff Radebe, a Stazi-trained lawyer. What else could have been expected? Sad!

      Klaus - 2012-07-01 18:52

      As a Vulcan erupts lava, ANC vomits deployed Cadres, the foam being our current form of "elected" leaders ?

      russell.w.wright.5 - 2012-07-02 07:05

      Yes you could make it up but nobody would believe you.

      sika.ncamane - 2012-07-02 08:57

      Dont you people drink? mxm stop acting like holly cows here... nxa

  • clivegoss - 2012-07-01 17:59

    Tony Yengeni heads up politicle education for the A N C ? No worries , that is why "normal" standard education has disappeared comrade. This crooked czar is on a roll.

  • antin.herinck - 2012-07-01 19:04

    Is it not preposterous, that there is such a thing as a need to call for clarity to avoid a FURTHER decline in confidence and investment -a full blown plunge now actually? As if they have not done enough damage already. And while the ANC-caused de-industrialisaton of SA is in full swing, the retards come up with grandiose but clueless "plans" to initiate beneficiation and processing of mining products. But anyone with more that three entrepreneurial brain braincells will ask: in this climate of prohibitive labour legislation, high labour/productivity costs, lack of suitably skilled labour, political uncertainty, high tax rates -that will likely escalate and insecure electricity supply for years to come, why would anyone start such an enterprise in SA? Why not go elsewhere -anywhere but here? Minerals can be shipped and paying for the transport will be more attractive than swimming upstream here in SA. Hell with bad luck, you can be 51% nationalised here in a decade or less -not as if THAT never happened before, up north!

  • russell.w.wright.5 - 2012-07-02 07:13

    of course the proposals are vague and of course it's linked to s second term for Zuma...How convenient is the timing of the conference and proposals? Second phase of the first transition?.....a phrase straight out of Mao's little red book.

      Glyn - 2012-07-02 12:05

      It is all just hot air designed to get Zuma a second term. Trouble is the alternative could be a lot worse! So what to do? Vote DA!

  • Glyn - 2012-07-02 11:48

    Is it just my computer or are all the comment "thumbs up/down" switched off?

      Koos - 2012-07-03 02:07

      PICNIC error: Problem in chair not in computer :)

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