Business must help rebuild a post-Zuma South Africa – but also confront bad policy decisions
Big Business has a major role to play in not only helping the government rebuild what was destroyed during the Jacob Zuma presidency but also to speak out about bad decision-making. At the same time, business is not government and operates with a fundamentally different set of incentives and assumptions.
Business Leadership SA CEO Bonang Mohale gives every impression of having a heart as big as his smile, and a vision for the country to match. Speaking at an event hosted by the South African Ubuntu Foundation and the Konrad Adenauer Foundation, he laid out some thoughts on this vision. They’re worth taking note of.
The theme of the event was the role of business in the post-Zuma era. It’s no exaggeration to say that for many South Africans, the Zuma presidency has come to represent the definitive post-apartheid watershed moment. Its message was simple and brutal: Neither democracy, nor a constitution, nor civic freedom, nor an esteemed political pedigree, nor widespread popularity was a guarantee of success.
As the Zuma presidency wore on, the venality and incompetence over which it presided became ever more apparent, and the damage it inflicted ever more serious.
That the Zuma era overlapped with the global financial crisis and its aftermath only exacerbated matters. South Africa has never been able to make up the ground lost and is presently a substantial laggard by the standards of comparable emerging markets.
It’s possible to put some hard numbers on this. Analyses published in Daily Maverick suggest that the purely financial costs in the second term of Jacob Zuma’s administration amounted to some R1.5-trillion — just under the sum of R1.8-trillion budgeted for 2019. Perhaps more worryingly, thousands of firms simply went to the wall over the Zuma years. The Enterprise Observatory of South Africa, for example, recently reported that about 83,000 companies in the financial and business services sector disappeared between 2007 and 2016.
This is bad news.
Mohale’s call was for business to assume a more proactive and socially engaged role. His ambitions were expansive. Business should involve itself more fully in building shared value for the country, in education, in land reform and in resolving the fiscal crisis.
The implications are intriguing. Despite the criticism lobbed at it, South African business has long made considerable contributions to the well-being of the broader society. According to Trialogue, Corporate Social Investment stands at a not insignificant R9.7-billion a year, and this might be an undercount. But Mohale appears to have suggested something more profound.
He pointed rightly to the transformative potential of education, and South Africa’s failings in this regard.
“SA is the only African country which became free and did not improve the quality of education,” he said.
“A study says 80% of Grade 4 learners cannot read with comprehension. So, business must take a leadership role in this regard.”
But what to do, specifically? Business might be able to fund some teaching posts, provide infrastructure, offer scholarships and so on. It does so already. But its ability here is practically limited, especially insofar as ensuring that millions of children — particularly millions of poor children, typically black children — receive an education that gives them a reasonable chance at socio-economic mobility and a middle-class life.
Similarly, business has an interest in successful land reform. Not only is there a moral imperative and some economic benefits to be drawn from it, but business will not be immune to the damage of botched land reform initiatives. Besides, political interests — extending into the presidency — have recklessly upped the rhetoric on this, positing expropriation without compensation as the miracle cure, while doing little to correct or even acknowledge the well-documented problems besetting land reform.
Business can donate land and fund projects. Business outside the agricultural sector could act on its rhetorical endorsement of land reform by, perhaps, offering interest-free loans to emerging farmers.
But in both these cases, whatever might be done directly by business is limited; it is certainly not the transformative action that Mr Mohale seems to be driving at. Fundamentally, these are creatures of government policy and as such will remain primarily government’s responsibility.
Business is not government; it operates with a fundamentally different set of incentives and assumptions. But it is eminently capable of exercising good citizenship, just like any other individual or interest group in society. Part of this is to accept responsibility for protecting what is valuable, and changing for the better that which is deficient — which in turn is surely what Mohale is alluding to.
Business has the potential to be influential, and a force for good. To play a role in dealing with the challenges of deficient education or the land reform malaise, it is precisely this that it must bring to bear. Given the crises that afflict the country, this is to be willing to court — and to weather — conflict.
It is to lay bare before government the consequences of failing to tackle the dysfunctions in education, even at the expense of alienating government’s powerful trade union allies.
It is to confront forthrightly the entirely predictable catastrophe of expropriation without compensation, rather than to genuflect before its supposedly noble intentions, or to muse on how it can be “done better” while sending money offshore and perhaps hoping to cut deals that will limit the damage to the country’s farmers.
This is never easy. Every incentive points towards being agreeable to the authorities that control licences and dispense tenders. Yet citizenship, properly understood, can be hard to live out.
It demands of all — whether of people or of the institutions and organisations that participate in and facilitate our myriad social interactions — the willingness to make hard and uncomfortable choices.
Today, this is a responsibility that business may not — in its own interest and in that of the broader society — be able to avoid. DM
Terence Corrigan is a project manager at the Institute of Race Relations.