EDITORIAL: Government drags its feet while business props up reform

It is not always easy to know where the government part of the business-government partnership ends and business begins. But there can be little doubt that without business constantly pushing for faster reforms in electricity, logistics and crime, and quietly moving in with resources of money and expertise, SA’s economic reform process would have advanced even slower than it has done.

Last week’s briefing by Business for SA on the two-year-old partnership had a fair bit of consultant-speak about structure and governance, with some ultradense slides devised by consultants (or “knowledge partners” as they call themselves these days), many of whom contribute their time for free, as do the business leaders.

But the numbers tell a story of progress, even if halting and difficult. And there can be few such initiatives globally, where business mucks in with time and skilled resources, in cash and in kind, to try to help fix the economic mess that government itself created.

Yet amid the level 6 load-shedding and the collapsing rail and port services, business made the simple calculation that if it wanted SA to be an environment in which business could be done, it would have to work with government.

And it would have to overcome the reluctance government often has about working with the private sector, as well as about opening up industries monopolised by the state to private sector competition and efficiency. Nor has it only been about pushing for longer-term reforms — companies are working with their public sector counterparts to try to fix things in the very short term, from mining companies putting drones and money into securing Transnet’s coal line to shipping companies sourcing hard-to-find equipment for Transnet’s ailing ports.

The story B4SA told at last week’s briefing is that the partnership has helped stabilise Eskom and Transnet. Successes include the end of structural load-shedding and the reversal of freight rail’s sharp decline. Even in electricity, in which reform has gone quite far, there are still many obstacles, particularly in transmission and distribution, and much to be done. And rail is ample evidence of just how hard it is to turn around SA’s state-owned empires and implement reforms: the trajectory of rail volumes is up, B4SA noted, but it’s still behind target.

‘Delays remain a concern’

“Public sector reform readiness has slowed implementation,” the B4SA presentation politely says of electricity. And regarding priority actions at Transnet, “delays remain a concern”. For business leaders accustomed to the accountability and efficiency of the private sector, working with the public sector is surely a heroic struggle. Likewise public sector folk must struggle to open up to business. President Cyril Ramaphosa’s oversight has been important to enable that.

Yet the partnership has helped to halt the decline, if not yet to reverse it. It did so in part thanks to a clear focus on the three priority areas it identified for action — energy, freight logistics and crime and corruption — as well as to being rigorous about where it could add value and where not. But success tends to breed demands to do more. Business has already caved in to pressure from the president to include employment as a fourth stream for the partnership.

Though the private sector already had some impressive initiatives, such as Harambee, and yes, the partnership seems to have come up with interesting new ones. Now it is under pressure, whether from the president or from within business, to do something about the crisis in Joburg. Again, there is already a private sector initiative in the form of Jozi ma Jozi. And there is the big intervention led by the president himself.

Without solving the city’s toxic politics, it is unclear how much either can achieve. B4SA said last week it would do a careful assessment of whether it should become involved. Joburg is so important to SA’s economy that it must be hard to say no. But the business folk are rightly being careful about whether their particular modus operandi can add or solve anything. They should take care too not to dilute the important work they are doing on their existing core priorities.

Much good work has been done, but the crises are not yet over.