29 March 2016
Published with compliments: SEIFSA
Report Compiled By: Kaizer M. Nyatsumba, CEO

On Tuesday, 29 March 2016, Business Unity South Africa (BUSA) informed its constituency, on an urgent basis, about a meeting that Finance Minister Pravin Gordhan would have with the BUSA constituency at 10am on Thursday, 31 March. The invitation was extended to the CEOs and Chairpersons of BUSA’s member organisations.

SEIFSA President Angela Dick informed me that she had a prior engagement and could not attend the meeting. When I bumped into Bob Stone in the passage at the SEIFSA offices yesterday morning, I informed him, as one of the Federation’s Vice-Presidents, about the meeting and asked if he could come along with me. Thankfully, he was able to do so.

The meeting this morning was part of a series of engagements that Minister Gordhan and his team have had with the business community as part of a process of growing business confidence and, in the process, hopefully averting a downgrade for South Africa by international ratings agencies. These engagements began immediately after Mr Gordhan’s re-appointment in mid-December as Finance Minister and gathered pace ahead of the annual World Economic Forum in Davos. President Jacob Zuma subsequently tasked Minister Gordhan and BUSA President Jabu Mabuza to continue with efforts to improve relations between the Government and the business community.

At the beginning of the meeting this morning, Minister Gordhan explained that Deputy Finance Minister Mcebisi Jonas was at another function and would later attend the meeting. He duly did so some 45 minutes into the meeting.

In his introductory remarks, Minister Gordhan said that in his first week back in the job he was confronted by “the SAA issue”, and received a call a few days later from SAPS Hawks Head General Berning Ntlemeza informing him that he (the General) wanted to see him (the Minister) about two investigations that he was conducting into South African Airways and the SA Revenue Service.

Minister Gordhan proceeded to brief the meeting on the international road show that he and the business delegation – later joined by labour – embarked upon in the UK and the USA a few weeks ago. He said that, although they were relatively well received, generally ratings agencies and foreign bond holders were no longer interested in the grand economic plans that South Africa has. Instead, the Minister explained, “they want to know what South Africa is actually doing”.

Minister Gordhan said that he and the delegation discovered, during the road show, that investors were very well informed about developments in South Africa, “including the various political controversies”.

Minister Gordhan made the point that he and the delegation had walked away with the clear impression that political and economic stability was of great importance to investors, and “that politics and business are inextricably linked”. He said that economic growth was of paramount importance, and observed that “unfortunately business confidence is lacking”. He stressed that the Government had now accepted that it had a responsibility to create a climate conducive to growth: “No government can be against business, and no government can be in favour of business”.

Through that statement, Minister Gordhan sought to make the point that the Government had a responsibility to engage with and take on board the interests not only of the business community, but also of other stakeholders within the country – with labour being one of them.

Concluding his opening remarks, Minister Gordhan said that “there are things that the Government can certainly do in each of the sectors represented” at BUSA, and mentioned specifically the challenges that the mining sector has with the Mineral Resources and Petroleum Development Amendment Act (MRPDA). He said that it was paramount that the Government got the balance right “between regulating and strangulating”.

During the Question-and-Answer period, former Standard Bank CEO Jacko Maree commended the Minister and his team for the brave efforts to avoid a downgrade and pledged the business community’s support. He said that the work that the Minister and his team have been doing over the past few weeks was essentially about the need for South Africa to achieve an inclusive growth.

Other business leaders seized on the opportunity to raise a litany of complaints about challenges facing their specific sector, including about the lamented policy incoherence in Government, with some Ministries and Departments sometimes ostensibly working against one another. At that stage, the meeting was in danger of becoming a gripe session.

In response, Minister Gordhan said that while there were many issues on which the Government and business would agree, it was also important to accept that there were others which would be “for constestation”.

On behalf of the metals and engineering sector, I also extended to the Minister and his team our appreciation of the phenomenal work that they were doing and expressed the hope that henceforth all parts of Government would view business as an important partner, and not as an enemy, as was the case in some quarters in Government.

Wrapping the meeting up, Deputy Minister Mcebisi Jonas stressed the need for general consensus that South Africa faces a political and business crisis that required a broader discussion involving all important stakeholders.

In his concluding remarks, Minister Gordhan gently chided those who approached the meeting as an opportunity to complain and urged them to “operate beyond their sectoral interests”. He said that while the Government now understood the regulatory challenges and remained committed to working on them, it was equally important that the business community also worked on business ethics, “especially in the era when this notion of State capture is gaining currency”.

“Don’t expect too much of us, but we’ll do the best we can. Let’s start working towards a common narrative. Let’s use a common language. Let’s work towards inclusive growth,” Minister Gordhan concluded.

He urged all present to ensure that they participated in one of the three working streams that had been created for discussion between Government and business.

I walked away from that meeting with a strong sense that the Treasury was, indeed, very keen on working co-operatively with the business community in the interests of South Africa. Both Minister Gordhan and Deputy Minister Jonas were open to engagement and seemed since in their efforts to form a strong partnership with business.

Report Compiled By:
Kaizer M. Nyatsumba