Policy incoherence is destroying the economy and jobs, says business

The Public-Private Growth Initiative has been launched at a Business Unity SA indaba in an effort to revive the economy

Policy incoherence and uncertainty has hampered business growth in the country leading to massive job losses, leaders of various sectors of the economy told delegates at a Business Unity SA (Busa) indaba on Tuesday. 

They said that the country continues to lose billions of rands in direct investment and the capacity to create millions of jobs due to policy confusion and weak government support.

The gathering, hosted by Busa, is to try and find ways to revive the economy.

While the government, business and labour have held frequent summits to formulate joint plans, the new Public-Private Growth Initiative (PPGI), which was introduced at the indaba, is advocating the formulation of five-year, sector-based plans.

The PPGI — led by Toyota Europe and Africa CEO Johan van Zyl, the Gordon Institute of Business Science (GIBS) professor Nick Binedell, and former constitutional negotiator Roelf Meyer — has done work in 22 sectors, several of which made presentations at the indaba.

CEO of agricultural business chamber Agribiz John Purchase said the capacity of the agriculture industry is being inhibited by a  lack of “relevant feasible policy” and targeted incentives, which would accelerate job creation. He said the industry plans to create about 20,000 new jobs yearly until 2022, although this, too, depended on the government’s response to its need for more support and co-ordination.

Currently, the agricultural sector employs more than 800,000 people.

Meanwhile, chair of the Hospital Association of SA, Melanie Da Costa, painted a grim picture of the future of the country’s health sector, also due to proposed legislation that she said would wipe out 132,000 jobs and decrease the sector’s contribution to GDP by R24bn.

The contested and highly controversial National Health Insurance (NHI) bill, which was sent back to the health department by the cabinet in December, and the Medical Schemes Amendment Bill are not aligned and present contradictions that would hurt the private healthcare sector, she said.

The manufacturing sector’s contribution to GDP, which fell from 24% in the 1980s to less than 13% in 2017, would continue to lag behind other emerging markets without serious government intervention, it was claimed. Ayanda Mngadi, who chairs industry body Manufacturing Circle, said that increased competition from imports, increased labour costs, high energy costs, and policy and regulatory uncertainty are just some of their challenges.

Mngadi said that the industry could double its contribution to GDP if the environment allowed.

The tourism sector has the capacity to create an additional 2-million jobs by 2030, said the industry’s Blacky Komani. He complained that the sector’s exclusion from the 2018 jobs summit was shocking, given its potential. Tourism currently employs about 750,000 people.

Co-operative governance minister Zweli Mkhize said that while business’s initiatives are admirable, little focus is directed at building townships and rural economies. The sector leaders made no mention of underdeveloped areas in their plans on how the economy could be rescued.

Article by Theto Mahlakoana • Business Live

2019-02-01T09:42:48+02:00