SA business industry hopes for continuity in reform agenda post crucial general election

Election posters in Cape Town as general elections draw near. Photo: Ayanda Ndamane/Independent Newspapers

Election posters in Cape Town as general elections draw near. Photo: Ayanda Ndamane/Independent Newspapers

Published May 28, 2024


The business sector in South Africa has expressed hope that the seventh government administration will forge ahead with the structural reforms post the general elections.

This as South Africans go to the polls on Wednesday to elect the government of their choosing after 30 years of democracy.

Business Leadership SA (BLSA) said yesterday that the sixth administration had made solid progress in stabilising institutions and driving reforms necessary to get the economy out of the low growth, low employment trap, we were stuck in for over a decade.

BLSA CEO Busi Mavuso said business acknowledged that important economic reforms had been made during the sixth government administration, including Operation Vulindlela to address systemic crises such as in the energy and logistics sectors.

Mavuso said the challenge for any democratic government was to make the choices that would pay off in the medium and long terms.

“What do I hope for from the next administration? Chiefly, that we accelerate the momentum we’ve managed to build so far,” Mavuso said.

“Operation Vulindlela, as a delivery unit, has proved to be a good model for achieving change. There is much more work to do – we need to conclude the visa reform process to make it easier to bring in the skills we need to kickstart the economy.

“The logistics roadmap also still has a long way to go. We need to conclude reforms that will enable the private sector to bring its skills and capital to turn around the performance of our ports and railways. Getting this right would immediately enable significant economic activity, bringing jobs and taxes with it.”

A variety of scenarios have seen the ruling ANC keeping its majority of the national vote though it would likely be reduced less to than 50%, forcing it to form a coalition government with one of the minority parties.

Analysts and economists have said that an ANC-DA coalition would be a preferable outcome for the economy rather than an ANC-EFF or ANC- MK Party arrangement.

Sanisha Packirisamy, economist at Momentum Investments, said an ANC-DA coalition was the most market-friendly, under which the country was likely experience a step-up in governance and accountability, a crackdown on corruption, increased investor sentiment towards SA’s economic prospects, and a revival in fixed investment.

“This would ultimately lead to a higher growth path for the country, enabling a reduction in unemployment and poverty,” Packirisamy said.

“In our view, [a coalition between the ANC and the EFF or MK Party] would result in the most economic damage given some of the more radical views expressed in their manifestos. A shift to the left in policies could result in a souring of international relations with the West, and capital flight as confidence in SA’s future growth plummets.

“The outcome of these elections will not just determine governance but also shape the economic trajectory and the country’s public finances, as well as the health of State-Owned Enterprises (SOEs).”

BDO South Africa’s head of public sector assurance, Yugen Pillay, called for transformation of South Africa's ailing SOEs, saying the spotlight should be on transparency and accountability as keystones for change.

Pillay said the lack of accountability and corruption, as revealed countless times in the findings of the Zondo Commission, had thrived due to the absence of consequence management, and a number of audit reports pointed to the urgent need for reform.

“If we seriously want to consider using prescribed assets or even drawing further on the National Treasury, it must be within a framework of robust public-private partnerships (PPPs). The private sector's involvement here, with greater controls in place and oversight, offers a promising solution,” Pillay said.

“For this model to succeed, though, government interference would need to be strictly prohibited to ensure operational autonomy. SOEs represent just the tip of the iceberg in this regard. Rebuilding trust in SOEs hinges on effective consequence management. Through PPPs and stringent oversight, we can instil accountability and pave the way for sustainable growth.”