South Africa needs to move from job creation to business creation

Perhaps once finance minister Tito Mboweni delivers his delayed mini-budget statement, we will be able to appreciate President Cyril Ramaphosa’s much-anticipated economic stimulus and recovery plan. As things stand, the president delivered his plan in much the same way he always does, with a generous dose of hope and promise. A peppering of nation building is also there but with nothing dramatic, really.

“Igniting economic activity requires partnership and collaboration," Ramaphosa said.

“It must be a national effort in which all of us work together to restore our economy to growth in the immediate term and prepare the ground for sustainable, inclusive growth into our future.”

Who can argue against that? However, what South Africans have been crying for is implementation. Even in the face of poorly conceived policies, which lean too much on political ideology instead of practical economic realities, implementation has not been our strong point. Perhaps the political culture of double speak has entrenched this self-defeating habit of political leaders saying one thing and doing something entirely different.

Who can explain our long-suffering insistence on trying to make SA a socialist country when much of our economy is capitalist? Instead of creating a balanced capitalism which suits us, we end up pandering to our capitalist trade partners while trying to woo our socialist leaning trade partners. While sounding radical and left-leaning, our leaders live lifestyles which epitomise capitalism in its crassest form. Perhaps this is why the president’s recovery plan does not quite get to the itch. We have heard this too many times before and little to none of it has translated into reality.

However, the latest advances by the law enforcement and prosecution agencies against corruption do give hope. Perhaps the president is on to something here. It remains to be seen if he will pull through and deal a decisive blow against corruption. This will eliminate the unnecessary drain of corruption on the fiscus. If that happens, the promises he makes in his economic stimulus and recovery plan may gain traction. Whether the ANC survives that, considering how it has created a dependency on the largesse provided by the loose procurement systems in government, remains to be seen. What we need is the confidence that can only be produced by the rule of law which prevails without fear or favour.

The president seems to have a greater appreciation for collaboration between government and the private sector than some of his predecessors. However, there is still a stubborn insistence among the political elite in this country that the government must be everything to everyone. So, the approach to job creation for instance remains to a great extent an attempt by government to provide jobs by itself. Though there is a discernible shift in attitude in the presidency, it may not be radical enough to dislodge the prevailing unsustainable and counterproductive approach to job creation.

“With a view to unlocking the potential to create more jobs on a large scale we have decided to set up a SA Infrastructure Fund, which will fundamentally transform our approach to the rollout, building and implementation of infrastructure projects.” 

The president goes on to say that his government will invite the private sector to partner with government in this fund. Hopefully, what the president means by fundamentally transforming their approach is that there will be more participation required from the private sector, particularly on implementation. SA has no shortage of business talent. I am sure there are also many retired business leaders who would jump at the chance of contributing towards implementing these projects. They may act for instance, as advisers or mentors to up and coming business leaders.

Part of this fundamental change in approach would also, hopefully, translate to creating a generation of business leaders whose approach to business is about building South Africa. This may require government to look at speeding up and simplifying the acquisition of business, entrepreneurial and management skills across a broad section of the population.

While it is appreciated that the president always mentions township and rural business development, hopefully this does not mean creating a system of dependence on state procurement by these businesses. What we need is a generation of businesspeople who can come up with creative, problem-solving businesses which are scalable and can transform our society.

It is for this reason that whatever business development efforts government invests in must include technological skills, innovation, and creativity. Ultimately, this requires a shift from job creation to business creation.