The South African business community has become frustrated with Governement, saying that they have had enough as the economy takes a hard knock from the Coronavirus lockdown.
Analysts have pointed out that this is perhaps the first time such a dramatic public disagreement has ensued between the business community and the government in a while.
"Business has hardly been outspoken during the Ramaphosa Presidency. At private meetings with government, business leaders may well be frank. But no corporate bosses have spoken out on the threats of Expropriation without Compensation, prescribed assets, or National Health Insurance.There have been disagreements over various things in NEDLAC and elsewhere but they've all been kept quiet. It's [now] in public," said Jonathan Katzenellenbogen, a financial columnist and the former Economics Editor of Business Day. What exactly happened? Recently, Busisiwe Mavuso, the CEO of Business Leadership South Africa, which represents the country’s biggest corporates, vented her frustrations publicly. She told the Sunday Times that the government is in “disarray” and in “denial” about the economic impact of the lockdown. She said it gave the impression “that those who are in charge are not on top of the situation.” Last week, Business For South Africa (B4SA) called for a rapid reopening of the economy. The group was set up to help in the fight against the Coronavirus. About this, Katzenellenbogen said: "The statement from B4SA was full of “we support government” padding, but the key message was that the lockdown is deeply flawed and will lead to economic ruin." How did we reach this point? Before President Cyril Ramaphosa announced a nationwide lockdown, he had been locked in consultations with business leaders and political parties. At the time, the larger part of the business community backed Ramaphosa's plans which were aimed at preparing the country's health infrastructure for the peak of the Covid-19 outbreak. This support dwindled as business felt the brunt of the lockdown. Katzenellenbogen said that the business community hadn't initially realized the full impact that the lockdown would have on the economy. "No one realized how drastic it was and how they would seek to control everything Business said 'fine, go ahead' but they had not absorbed some of the fine print and when they began to look at their economic models, they ran scared." "The signs are that they would not have gone public had Government been listening to them. It was a move to say 'look, we have no other way of doing this. We tried to explain this to you and we are not getting a fair hearing." However, Katzenellenbogen hints that the government might have begun paying attention to the groans of the business community, since Minister of Trade and Industry Ebrahim Patel announced that e-commerce would be allowed to operate during the lockdown. Where to next? "I don't think business likes politics. They want to be on the right side of Government all the time and maintain cordial relations," said Katzenellenbogen. "There is this great tension between those who favor a structural reform resolution of the terrible problems with the state-owned enterprises, a resolution of the fiscal deficit and easing of doing business in the country versus those who don't." "This is really the coming battle in South African politics. I think as South African politics realigns possible after this, one will see a clearer delineation between these two sides." "The break with government could mean that the “social compact” heralded by the President at the start of the lockdown is in tatters. What this could lead to is unclear. But it might be a step to breaking the logjam in the country’s politics, by at least placing the command-and-control radical economic transformation faction in one clear camp and the structural reformers in another." Watch the full discussion here:
1 Comment
Muhammad
18/5/2020 08:14:49 am
All businesses are feeling the pinch. It was obvious that they would eventually grow tired of this suffocating lockdown.
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AuthorZahid Jadwat is a South African writer, columnist, podcaster and radio show host. Archives
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