Following the postponement of the Budget speech from February 19 to March 12, panellists at the PwC ‘Responsible growth for a sustainable future’ panel discussion, on February 21, considered South Africa’s overall business environment and the implications of the proposed two percentage point increase in value-added tax (VAT) on business and society.

Despite the postponement, PwC South Africa CEO Shirley Machaba expressed that the discussion remained relevant at a time when South Africa continues its reform efforts.

“These efforts are crucial as we address pressing challenges such as energy security, infrastructure development, including the water crisis and high unemployment,” she said.

“As we reflect on South Africa's challenges and opportunities, it's essential to consider how businesses across sub-Saharan Africa are navigating the evolving global landscape,” she added.

Machaba argued that innovation and adaptability would play a key role in ensuring the local economy was sustainable and “future ready” as the country confronted challenges such as the energy crisis and infrastructure constraints.

Machaba described public-private partnerships as a “vital mechanism” for unlocking the potential of key sectors, such as logistics and infrastructure.

“These partnerships are not only crucial for economic recovery, but are foundational for building growth that is inclusive, responsible and sustainable for generations to come,” she said.

During the panel discussion, PwC South Africa tax policy leader Kyle Mandy said the country was in a fiscal crisis and was facing a tax burden.

“We don’t have a revenue problem, we have a spending problem,” he said, noting that South Africa should have been cutting expenditure in the right places for years now.

In this vein, PwC South Africa partner, chief economist and sustainability leader Lullu Krugel argued that the country was facing a revenue base and growth problem.

She also argued that, while it was essential to reduce unnecessary expenditure, emphasis should also be placed on investments that promotedgrowth.

“We’re supposed to see fiscal policy now that stimulates growth, we’re supposed to see fiscal policy that cuts taxes, that puts money back into the system, and we're seeing the complete opposite of that. We should not have gotten to a space where we needed to increase VAT by two percentage points. That shouldn't have happened," she said.

Meanwhile, Business Leadership South Africa CEO Busisiwe Mavuso noted the importance of private-sector participation, arguing for the creation of a conducive environment within which business could operate.

Mavuso also emphasised the importance of good leadership.

“I really think that as much as we can do all of these other things, we need to get the right people in power.”

Also speaking on the panel, political journalist and author Qaanitah Hunter described the Government of National Unity as a “resilient moment for democracy in South Africa”.

She noted the critical role of local government in service delivery and economic growth, with Mavuso arguing that the Budget should focus on cutting spending and prioritising the creation of sustainable jobs and economic growth.

Hence, Krugel argued for the importance of holding government accountable.

“We should never have gotten here, and it's going to take some time to turn around. However, I think the most important thing is actually forcing accountability,” she said.