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Johannesburg – Business is not purposefully hoarding cash to stifle the economy, according to Business Unity South Africa (BUSA) president Jabu Mabuza.
Mabuza was speaking at the launch of BUSA’s paper on a business approach to economic transformation on Tuesday. He explained that there was less investment by business due to the economic headwinds, and that claims of an investment strike by business are untrue.
READ: BUSA talks business on transformation
Union federation Cosatu previously criticised business for being on an investment strike, and taking profits out of the country. Similarly, at its congress last year the National Union of Metalworkers of South Africa said big businesses were not investing back in the economy.
But Mabuza said the lack of investment is a function of the slowing economy. “If the economy goes down, you put money aside so that when the economy picks up, you can take advantages of the opportunities.”
He added that leaving money in a bank account to earn interest would yield better returns than investing in the mining sector. He explained that the rand had depreciated over the past 10 years relative to other currencies, like the US dollar. For this reason, multinationals have kept their profits in these foreign accounts.
“It worries me when enlightened, educated and smart people… make statements not based on facts and science.”
Distrust in government
Answering a question on the breakdown of trust between business and government, Mabuza explained the gains made by business last year were lost due to developments in recent months.
“We worked with government. We went all over the country and the world to say what the government says it is going to do to repay debt. We will generate the taxes, we will create the employment, we will invest and ensure these things can be done. The developments of the past few months have damaged that trust.”
Mabuza said that government has been receptive of their views that trust needs to be rebuilt.
“It is an important part of any relationship that we must trust each other.”
WATCH: Moving on from a breakdown in trust with government
Mabuza added that BUSA, Business Leadership South Africa and the CEO initiative are willing to work with government to find solutions going forward.
“Business must demonstrate not only in words what our commitment to transformation is - not only to transformation but to lead transformation.
READ: CEOs agree to work with Gigaba, but want state capture inquiry
“We have the resources, the intellect, we have everything it takes… We need to come up and deliver a strategy that will fundamentally change the socio-economic environment which has excluded individuals.”
Mabuza said achieving transformation will lead to nation building, and allow black people to experience the dividends of the social market economy and real inclusive growth to attain social cohesion.
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