BUSINESS MAVERICK

What’s going on with the Public Private Growth Initiative? A lot more than you might think

By Tim Cohen 22 September 2019

Roelf Meyer says the level of constructive communication between business and government ‘is greater than it has ever been in 25 years’. (Photo: Felix Dlangamandla/Netwerk24)

It’s probably an understatement to say most South Africans are disappointed at the rate of change under the Ramaphosa administration. People who committed fraud and theft of grotesque dimensions under the previous administration are still zooming around in their SUVs as though nothing has changed. Economic growth is slow. Yet talk to Roelf Meyer and he will tell you his Public-Private Growth Initiative (PPGI) is going like a Boeing. How can that be?

Ever since South Africa’s constitutional negotiations, Roelf Meyer has had the uncanny ability to look at a totally impossible situation and say to the world – and sometimes perhaps to himself – this is eminently fixable. “We just need to…” And we are off. Along with that remarkable gift goes a really remarkable ability to be credible in the face of adversity, constructive in the face of cynicism and disbelief and to have a certain gift of the gab.

South Africa’s economy showed signs of a remarkable turnaround early in Cyril Ramaphosa’s presidency. Here, at last, was somebody who actually got it. Gone were the days of incredulity at yet another disastrous appointment of someone plainly not up to the task. Yet, since then, the economy has lagged, notably in the first quarter of 2019 with its negative GDP growth of 3.1%. Hopes that SA will rebound strongly are waning and, with that, frustration is growing. Yet, in an interview, Meyer says the level of constructive communication between business and government “is greater than it has ever been in 25 years”.

Government programmes that were stalled for years are getting attention. “Workstreams” – because that is what they call them now – are pressing ahead, though some are lagging. But, generally, says Meyer, “We are all focused on the same thing: the growth agenda. This has never happened before.”

During the Zuma administration, it would have been unthinkable. And it’s worth remembering that during the Mbeki administration the interaction between business and government was between a select group of local and foreign businesspeople in what was really a conversational effort. The focus on the same outcome, despite differences of function and belief, reminds Meyer of the constitutional negotiations: “There is a bit of deja vu.”

The tools of those negotiations are back, too: the above-mentioned “workstreams”, the working groups, the specific plans, the directed interventions. And the grand plenaries, one of which took place in Pretoria last week, attended by business representatives and close to 100 people from different government departments. Since the start of the PPIG, one other thing has changed, and is important because it has been suspiciously unannounced. The PPIG was initially positioned in the Presidency, under Nkosazana Dlamini-Zuma, who was responsible for planning, monitoring and evaluation, in February 2018. When Zuma was made Minister of Co-operative Governance in the latest cabinet reshuffle, PPIG was re-located under Ebrahim Patel in the Department of Trade and Industry.

Business people would probably say “out of the frying pan into the fire” about that change, but Meyer is enthusiastic.

Our experience so far is very positive, for a number of reasons. The minister has given us priority attention. It remains critical for us to be engaged with the president, but the DTI is the operational department,” he says.

How is it actually working? The root concept is pretty simple. Private sector organisations undertake to create a certain number of jobs and make a certain amount of investment against a sectoral “master plan”. Government, for its part, undertakes to understand the “impediments” – and that word comes up repeatedly – to putting the plan into action. And to remove them. All this behind-the-scenes action resulted in Ramaphosa being able to claim in his 20 June 2019 State of the Nation speech that R840-billion in new investment had been promised by the private sector over the next five years; that so far 43 projects were involved in more than 19 sectors; and these initiatives would create 155,000 jobs in the next five years.

Of course, it’s not quite as easy as that. Everything, says Meyer, depends on proactive interventions by sectors. Once that is on the table, “government departments are responsible to perform according to their own plans, and the way the private sector is linked to that means it is also challenged”. One just has to hope the Competition Commission is not looking at this sectoral collaboration with too jaundiced an eye. Oh, wait a minute, that also falls under Patel’s widening ambit. Problem in hand, we hope.

In any event, how is this all going, really? In some ways, the model is what used to be called the Motor Industry Development Plan, which was replaced by the Automotive Production Development Programme (APDP) in 2012, to run until 2020, and has now been replaced by the South African Automotive Masterplan (SAAM). This long, ongoing constructive relationship between the motor industry and the government has many supporters and some detractors, but there is no denying it has created a viable industry in South Africa, one that has become progressively more important as the mining industry has waned. But not all industries are the same. And neither are all government departments.

There are workstreams that are working very well, others are lagging behind,” reports Meyer. “But as long as there is continuous follow-up, we can get everybody to the same level. From the experience we have so far, there is a real willingness to collaborate. That does not mean every department is on the same level. Some of our private sector colleagues will say they don’t find it that way. But we can and do intervene.”

Much depends on the state of the industry and some are starting from scratch because the industries involved have never had functional associations, possibly for competitive reasons, but presumably also due to wariness of the country’s competition laws. But the existence of the PPGI means some industries have a reason to collaborate for the first time. One example of this is the ITC sector, says Meyer. “A year ago, they were not organised. Now there are 10 companies that have started to organise and have come forward with a plan. There is now an excellent relationship and they are extremely happy with this new situation.”

So, what about the impediments and “inhibitors”? What are they and how can they be fixed? One example, says Meyer, is the framework for energy. It has been stalled for a long time and is a typical example of where the government has to move very quickly, creating a regulatory framework for renewables, among other projects. The construction sector, deep in trouble, also needs government cooperation for planning. And a few infrastructure projects wouldn’t hurt.

This sounds great, yet you have to wonder. If there is all this communication, with impediments being identified and so on, how is it humanly possible for it to take so long to fix South Africa’s visa regime – which has gone from simply bonkers to totally confusing, which is arguably worse. Meyer is refreshingly honest: “I can’t give an answer. I have not seen sufficient progress, despite the fact that the President has spoken about it in Parliament.

I think we have to admit that certain departments are better organised than others. There are departments that cope with the new requirements, for example, communications. What many people find so nice about their engagement is they are talking to people who understand their language. It’s like they are on the same platform. But you do find others where people don’t have an idea what it’s all about. That is what we have to turn around.”

Meyer continues: “We have let ourselves down as a country. It’s not just the looting, there was also poor administration.”

He doesn’t say it, but we know what he is talking about: all those weird appointments of people who had transparently no clue about the situations into which they were suddenly and outlandishly thrust. What Meyer does say is that the “PPGI is about recovering from a bad situation”. You can say that again. And he probably will. BM

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