The B20, which is being hosted in Cape Town this week, provides “an unprecedented opportunity [for South Africa] to engage with the world and build our relationships while plugging into the wider G20 agenda to project South Africa’s interests to the global stage”, Business Leadership South Africa (BLSA) CEO Busi Mavuso states in her weekly newsletter.

“It ensures that South Africa is part of the conversation and that our contributions are recognised,” she adds.

Through eight different task forces, the B20 will develop policy recommendations to promote inclusive growth to be presented to the G20 later this year. Brazil chaired the G20 last year.

Business organisations BLSA and Business Unity South Africa (Busa) are jointly responsible for the programme of the B20, with Mavuso and Busa CEO Khulekani Mathe to lead a local business advisory council to assist the B20.

Various senior South African business leaders are heading task forces, ranging from trade and investment and sustainable food systems, to digital transformation.

Over the course of the year, close to 3 000 business leaders from around the world are expected to be part of the B20, Mavuso avers.  

Post this week’s B20 launch, the task teams will start working toward position papers that will feed into the G20 process later this year.

Separately, the government is leading the ramp-up of the G20 agenda, beginning with the meeting of G20 foreign ministers in Johannesburg last week.

Mavuso highlights that this provides opportunities for South Africa, including building diplomatic relationships with the wider world, which would underpin international trade and investment.

GROWTH IMPERATIVE 

Mavuso also stresses the importance of domestic growth, with 3% targeted by the end of the year, as a start.

She posits that the last-minute Budget delay last week is a symptom of the pressures that fall on government when growth is scarce.

Mavuso notes that the fallout over increasing the value-added tax rate to try and make the books balance can only be resolved in the short term by cutting spending or finding other taxes to raise.

“But as we’ve now learnt well, many other taxes simply fail to generate the revenue expected, because our tax rates are above world averages so taxpayers simply move their economic activity to other jurisdictions in response,” she warns.

Mavuso also advises against resorting to further debt, stressing that in the past, this saw the economy constrained, government finances consistently worsening and investor confidence eroded.

Over the last four years, investor confidence has been gradually restored, showcased in several credit ratings upgrades, Mavuso points out.

She adds that government’s debt has become cheaper to finance, freeing up revenue for expenditure.

“We are on the cusp of consolidating the benefits of these improvements and furthering the path toward full investment grade. Ultimately, that will lead us to the point we all desire, which is for government to be able to sustainably increase social spending while also improving its financial position, which is possible when we have economic growth,” Mavuso highlights.

“There are a great many important tasks ahead of us to ensure we do deliver the growth we need, from consolidating our structural reforms to successfully building our global relationships. This week will be important on the latter front, but the important work on structural reforms continues.

“Our message to the world must be clear, that we are fixing what doesn’t work, improving government’s fiscal position and ensuring we are growing our economy,” she asserts.