Business Leadership South Africa (BLSA) CEO Busi Mavuso has described the domestic automotive industry as the “unsung hero of the South African economy” after joining the naamsa | The Automotive Business Council’s 2024 South African Auto Week conference, in Cape Town, from October 15 to 18, where she commended the industry for being forward looking.

“The industry must transition to cleaner fuels, particularly electric vehicles, and there was much at the event about the effort,” she said in her weekly newsletter on October 21.

Mavuso joined a panel at the event to discuss the outlook for business under the Government of National Unity (GNU) and the positive momentum it had been creating for financial markets and business.

“[The GNU] has the potential to galvanise the industry’s transition, in advance of the imposition of the EU’s Carbon Border Adjustment Mechanism, which will impose tariffs on imports that have a large carbon footprint,” she said.

President Cyril Ramaphosa also spoke at the event, pointing to the fact that the industry accounted for 15% of South African exports and employed 116 000 people directly in vehicle and component manufacturing.

He also noted that it had been a century since vehicle manufacturing began in South Africa, with the first Model T Ford having rolled off a production line in Port Elizabeth in 1924.

“That is a proud legacy and the industry continues to play a big role today. It was good to hear how it is preparing for the future,” Mavuso said.

She also lauded the strong show of political support for the industry, with Ramaphosa and Ministers, such as Trade, Industry and Competition Minister Parks Tau, in attendance.

“Their presence is good for confidence and there were conversations that indicated a strong political desire to support the industry to be competitive and to grow,” Mavuso said.

However, she recalled that, over the past few years, automotive manufacturers have had to contend with loadshedding and logistics challenges in the same manner as other industries in the country.

“That has been a major constraint on its growth for several years. But [the automotive industry] is now benefitting from progress made, with a more stable electricity supply and some easing of congestion in ports.

“It needs effective rail and ports to get vehicles to the 148 countries it currently exports to, selling R271-billion worth. It also needs effective local government services in order to operate its plants. This is true of all businesses, and it is why it is critical that we have effective working infrastructure at the local level,” Mavuso said.

She said the effort to drive investment into infrastructure has been a hallmark of Ramaphosa’s time as President, with the creation of Infrastructure South Africa (ISA) and the Infrastructure Fund as part of those efforts.

“I was pleased to see last week the launch of a reinvigorated effort to drive the development of projects to accelerate infrastructure investment. The Department of Public Works and Infrastructure (DPWI), together with ISA, have launched a window for submissions to apply for project preparation support,” Mavuso noted.

Under the project preparation support bid window, which was announced on October 15, all levels of government can apply for support for project preparation funding support for public infrastructure projects. This applies to all sectors, from transport to municipal infrastructure.

“This tackles one of the challenges facing projects – the need to make them bankable. This means the project is sufficiently well developed to be viable for funders, with a clear risk and return profile that investors can be comfortable with,” Mavuso said.

She pointed out that there have often been complaints that project developers lack the capacity to get proposals and plans to the bankable stage and, as a result, the projects are never able to attract funding.

“This is particularly important for projects that will form public-private partnerships, in which the private sector will invest and potentially manage or build the infrastructure,” Mavuso said.

Public Works and Infrastructure Minister Dean Macpherson has said the project preparation bid window will help increase the trust the private sector has to invest in State infrastructure projects, which is critical if large volumes of investment are going to be mobilised.

He said government is aiming to rapidly turn South Africa into a “construction site” that will create growth and jobs.

“I can only applaud the sentiment,” Mavuso commented.

She said it was important that infrastructure be considered in terms of its impact on the economy, insofar as it plays a key role in enabling companies, such as those producing cars and components, to be effective.

“Infrastructure is not important for its own sake, even though it creates jobs during the construction period. The real payoff is [in] enabling companies and entrepreneurs to access markets and operate efficiently. That then enables them to invest, which is when much more job creation and economic growth happens,” Mavuso said.

She added that both the naamsa conference and the DPWI’s announcement are encouraging, as they show that government and business are “hearing each other” and understanding what needs to be done to unlock growth and opportunity.

Mavuso also highlighted a roundtable discussion that she recently held alongside JP Morgan chairperson and CEO Jamie Dimon where geopolitics, the global economic outlook, US elections, interest rates and the role of business in socioeconomic development, were discussed.

“What struck me most was Dimon's emphasis on the importance of community development by business as well as the importance of business and governments working together. South Africa was his last stop on an African tour, which made the discussion even more significant.

“It's heartening to see a global financial giant like JP Morgan recognising the potential and opportunities in Africa. His visit underscores the continent's growing importance in the global economy,” Mavuso said.

She said the discussion added a global perspective to the themes that are being grappled with in South Africa, particularly regarding how countries that succeed are those in which government and business work well together.

“I left feeling encouraged and motivated, knowing that organisations like JP Morgan are dedicated to making a positive impact on the socioeconomic landscape,” Mavuso said.

However, hope notwithstanding, Mavuso also expressed concern about recent news of the National Prosecuting Authority’s (NPA’s) struggles in obtaining national security clearance for its senior staff.

“Clearance is the responsibility of the State Security Agency, an agency that was deeply embroiled in State Capture. The Zondo Commission and a specially appointed Presidential Review Panel made many recommendations including new legislation and the splitting of the agency into domestic and foreign arms. Those recommendations are still being implemented,” she said.

Mavuso noted that the rebuilding of the NPA poses a threat to those who are yet to face justice for their roles in State capture.

“There is every incentive for those who could be in the firing line to use their powers to frustrate its efforts and cast aspersions against its senior leadership. We saw this playbook used so often during State capture to undermine the South African Revenue Service, among others. We must see through it now.

“The NPA is vital to the restoration of the rule of law in our country, which is essential to our economy, and it is important for all of us that justice is done. Its efforts must be supported,” Mavuso emphasised.