Business Leadership South Africa (BLSA) is encouraged by the quick steps taken by new Trade, Industry and Competition Minister Parks Tau to engage with business to ensure open channels of communication, CEO Busi Mavuso says in her latest weekly newsletter.

She notes that the Department of Trade, Industry and Competition (dtic) has, for many years, frustrated business rather than supported it. Further, many of the institutions and regulations overseen by the department need reform to be effective in delivering the improvements in the business environment that are desired.

The dtic should be at the centre of efforts to create a conducive business environment, while creating appropriate regulation to direct investments in the economy.

Reform can enable these entities to be very positive for the business environment if they are run effectively. Institutions such as the South African Bureau of Standards support quality in South African industry, while the special economic zones can support industrialisation.

Mavuso notes that media organisations have reported that the Minister intends to overhaul the boards of 11 of the 18 entities the dtic oversees.

Among the entities that will be reviewed are important regulators such as the Competition Commission and the Takeover Regulation Panel, as well as funders such as the Industrial Development Corporation, the National Empowerment Fund and the Export Credit Insurance Corporation.

“All of these have the potential to be important drivers of economic activity, if they function optimally,” Mavuso says.

“The Minister’s intentions to fix the leadership of the department and many of the entities it oversees are welcome, as the department has had people in acting leadership positions for years, while there have been many vacancies in entities it oversees,” she adds.

Mavuso notes that during recent meetings with business organisations, Tau has highlighted the importance of industrial policy that supports export-led growth and highlighted the need to revisit the Economic Recovery and Reconstruction Plan developed by business lobby Business For South Africa during the Covid-19 pandemic to identify implementable strategies.

“He is also very clear about the importance of collaborative efforts and emphasised the need to work together in crafting solutions and synchronising our initiatives,” she notes.

Mavuso suggests that, during the review process, the Minister should support and encourage effective leadership in the institutions overseen by the dtic.

While the organisations may not perform perfectly, the wholesale replacement of boards creates major risks through the loss of institutional memory and experience, she notes.

Many boards have effective leaders within them, who may be frustrated by others. Care must be taken to ensure the right people are kept in their roles, advises Mavuso.

“The boards must be given clear mandates and empowered to deliver on them. Leadership must be given political cover to focus on delivering.

“There should not be micromanagement and meddling from politicians, though they must ensure accountability from those in leadership roles. There is enough evidence from State-owned corporations of boards and management teams rendered ineffective by political meddling,” she recommends.

An active relationship and engaged partnership between the dtic and organised business can help to deliver an improved business environment, Mavuso says.