Despite the great difficulty that is involved with running a business in South Africa, the private sector has taken a very pragmatic approach to dealing with the challenges to the business environment, including ideological resistance, vested interests in the status quo, loadshedding and the flawed logistics system.

Business Leadership South Africa (BLSA) CEO Busi Mavuso says in her latest weekly newsletter that businesses have to navigate many obstacles, from employment regulations to getting suppliers, as well as getting prompt payment from government.

She points out that President Cyril Ramaphosa had already in previous years’ State of the Nation Addresses (SoNAs) emphasised the importance of improving the business environment, including by reducing the regulatory barriers for small businesses and working with social partners to build supportive ecosystems for entrepreneurs.

However, in his latest SoNA, presented last week, little was committed to improving the business environment.

She notes that while much has been done to reduce red tape for businesses, there are still challenges in this regard.

“While some regulatory reforms have eased the burden on business, particularly the ability to install solar electricity with tax incentives and for larger companies to build their own generating capacity, it has overall been getting harder to run companies,” Mavuso states.

She adds that, coupled with these issues, skills have been harder to find owing to the weak performance of the education system and the migration of skilled individuals overseas.

Additionally, any business trying to hire skilled foreigners faces many months of delays, including backlogs of applications at the Department of Home Affairs that continue to accumulate.

Moreover, crime and corruption are rampant, Mavuso says, adding that construction mafias and business forums continue to extort businesses across the country.

“Tackling crime and corruption is a key workstream in the partnership between business and government to deal with our most urgent challenges.

“While the President positioned tackling crime and security as a key priority, the focus was on boosting the numbers in the ranks of the police. However, what we urgently need is a substantial improvement in the performance of crime intelligence, investigations and ultimately prosecutions,” she argues.

Mavuso acknowledges that many individuals within President Ramaphosa’s government are reluctant to deliver the necessary changes, whether it is owing to ideological resistance or vested interests in the status quo.

The Presidency’s Operation Vulindlela is an effective intervention to push forward reforms and make sure they actually happen, but the President’s speech is often strong on imagination but then less strong on translating vision into reality, Mavuso highlights.  

She suggests that the President ultimately needs a Cabinet that shares his reform vision and is committed to its swift implementation. When reforms hit delays, it is often simply because decisions are not being made and bureaucratic processes are not being pushed forward.

There can be many reasons for that, but a lack of political will at the top of departments often seems to play a role.

“If we are to deal with our many problems, we must focus on improving the business environment. It is key to enabling companies to establish and grow.

“Growing companies create employment and taxable revenue that can drive real change across the country. We, at BLSA, are committed to driving that forward,” Mavuso concludes.