Business Maverick


President Ramaphosa’s social compact, promised 580 days ago, faces more delays

President Ramaphosa’s social compact, promised 580 days ago, faces more delays
President Cyril Ramaphosa. (Photo: Gallo Images / Beeld / Deaan Vivier)

A social compact that President Cyril Ramaphosa promised more than a year and a half ago has not been finalised. This is because negotiations at the National Economic Development and Labour Council have gone awry.

During his February 2022 State of the Nation Address, President Cyril Ramaphosa promised a new social compact would be completed within 100 days.  

The compact would outline the government’s programme of action — in partnership with organised business, labour and communities — for building a better and more inclusive society by growing the economy, creating jobs and tackling crime and corruption.  

Wednesday, 13 September, marked 580 days since Ramaphosa made his promise and the social compact has still not been finalised. This is because negotiations at the National Economic Development and Labour Council (Nedlac) have gone awry.  

All parties at Nedlac are pointing fingers at each other for the delay. Organised labour, business and communities have largely blamed the government for stalling the process and not agreeing to the proposals they came up with to include in the compact. 

The government has blamed labour, business and communities for fighting among themselves over the contents of the social compact. In other words, the government has taken a back seat and bystander position, while it claims to watch disagreements unfold among its partners. 

In Nedlac’s recently published annual report, representatives from organised labour and communities expressed disappointment that an overall social compact had not been finalised. 

“It is important to acknowledge that collectively, we have not risen up to this challenge, despite the crucial mandate it entails in responding to the multiple and intersectional crises confronting our society,” Thulani Tshefuta, Nedlac’s community convenor, wrote in the annual report.

“We believe that social partners can still commit to collective actions to achieve higher levels of investment and growth, increase employment, expand support for the unemployed and tackle poverty.”  

Social compacts are common around the world. In Asia, social compacts are geared towards maintaining high levels of economic growth and production. In Europe, social compacts tend to focus not only on production levels but also on the general wellbeing of the populace. And since 1994, social compacts in SA have focused on creating prosperity for all. 

Collapse of draft social compacts 

At least two frameworks of the social compact have been drafted since early 2022, the latest of which was in September last year. The frameworks included many priority actions to boost investment and growth in the economy, increase employment, allow increased private sector participation in the economy and expand welfare support for the unemployed. However, some of the draft frameworks have been rejected by big business and labour.  

Big business has argued that the priorities in the framework are too many and fragmented. Labour representatives believe that the draft social compact framework doesn’t go far enough in protecting worker rights, removing unfair labour practices and protecting wages from the rising cost of living. 

Matthew Parks, the parliamentary coordinator for the labour federation and Nedlac member Cosatu, said the government had rejected the latest draft social compact framework drawn by business, labour and community representatives — adding to the delays in finalising a compact.

“The delays and disagreement to finalising a social compact were with the government. A social compact was drafted at Nedlac with government and social partners last year [in] September. As we were about to finalise it, the government asked for space to draft a new social compact,” Parks told Daily Maverick.  

Since then, Parks said the Nedlac partners would hear infrequently from the government, and the meetings it initiates to negotiate social compact terms are “routinely cancelled at the last minute”.  

Daily Maverick understands that the government rejected the latest draft social compact framework because communities and labour representatives lobbied for the R350 per month Social Relief of Distress grant to be increased to R600 until the implementation of a universal basic income grant. The government did not want to commit to this, saying it would cost more money to implement at a time when public finances are under pressure.  

The patience of business representatives at Nedlac is wearing thin over the stalled negotiations.  

Cas Coovadia, the CEO of Business Unity South Africa, said at the Nedlac summit on Friday: “We have to reach consensus and get out of our comfort zone robustly. Social partners that sit at Nedlac spend most of their time arguing with each other in these abnormal circumstances. We spent a year doing that instead of focusing on what we can do through social compacting on particular issues.” 

The minister of employment and labour, Thulas Nxesi, has urged Nedlac delegates to move beyond their narrow interests when working on the social compact and to seek solutions. 

“Whether we want to accept it or not, social compacting, which we have not achieved, is accomplished through compromise. We have to learn to compromise to achieve this. We can’t sit in our corners and be fundamentalists,” Nxesi said at the summit. DM


Comments - Please in order to comment.

  • gertman says:

    Did not expect any work to be done. Nor do I expect it to happen at all. Try another commission of enquiry? Not that the latter will lead anywhere, but at least another promise can be made…

  • Ben Harper says:

    NEDLAC, another useless organisation. Government has done absolutely and will do absolutely nothing to foster the growth of business. Government, or should I say the anc, are focused on one thing and one thing alone – taking what others have built. Not one piece of legislation encourages the development and growth of business, it’s ALL about hamstringing business and forcing businesses to give ownership of their hard earned achievements to undeserving 3rd parties and forcing businesses to employ unemployable people that can achieve nothing on their own

    • Allan Keyzer says:

      Totally correct!

      The problem with NEDLAC is how it is constituted with Government, Labor and Business being the parties. As Government and Labor have the same positions and goals Business can never negotiate some thing only having in effect a third of the vote. Labor should not be at the table and then it could be possible to go forward if not nothing will ever come out of NEDLAC.

  • Jennifer D says:

    Nedlac wants an increase and more pressure on business to look after people who are already not producing. Government doesn’t have the funds to provide R600 to such a huge section of the population – 47% of the population relies on social grants. These people supplement the grants through informal employment which at this point hasn’t been quantified. In addition to social grants, government has 1,3 million of the most unproductive and highly paid employees earning around R600 billion.
    And 9% of the population pays taxes. So the question is how does government carry on paying for all this, and at what stage do South Africans step up and start producing for themselves.

  • mjhauptstellenbosch says:

    When everybody was shooting Pres Zuma down,
    I told everybody rather accept the lesser evil,
    and I was crucified for that.

    Can you remember how Pres Cyril was hailed as our saviour?

    Up to date, the only President that kept his promises,
    even those made before his election,
    was Pres Trump.

    BTW, a simple time-line will show you that,
    during the period that Pres Zuma was “blasmefied”,
    the murder on Ms Babita was planned.

    So, all this negative talking of Pres Cyril suits the state criminals well!

  • Deon Botha-Richards says:

    As is typical labour puts the demands of the employed above the needs of the unemployed

  • Beyond Fedup says:

    Just another vacuous commitment by Cyril the spineless and useless that has never materialized. Is anyone surprised? This sleazy conman talks the talk but never walks the walk. It is hardly surprising that the country, economy and government finances is in such a poor state given that we have absolute idiots, incompetents and dinosaurs in cabinet with their failed communist dogma as their god. Think of the prized morons of Patel, Nzimande, Mantashe, Gordon, Nsexi etc. In the odious anc, SA has a recipe for failure, bankruptcy, poverty and disaster. We need to consign these incompetents and thieves to the dustbin of history in order to move forward.

    • mjhauptstellenbosch says:

      Calling Pres Cyril “spineless and useless”,
      and calling him a “sleazy conman”,
      and the rest of the government “idiots and thieves” ,

      I would really like to know how this contribution is helping the readers,
      seeing that this comment of BEYOND FEDUP passed moderation.

  • Karl Sittlinger says:

    “Social Compact” is ANC code for: You guys do the work, we will take the credit. What is not achieved we will blame you for anyway.

  • Beyond Fedup says:

    mjhaupt – at least with Cyril he doesn’t have to steal, unlike the voracious and rapacious zuma, who enabled state capture. Yes you were right and that is my point – expressing total revulsion for Cyril as he promised much i.e. a new dawn and it was all nonsense. The solution to SA”s problem is to vote this obnoxious party out of office.

  • Barry Messenger says:

    Just another buzz-phrase, no more.

  • Jimbo Smith says:

    Here we have a President whose skills base is limited to promises, denying, blaming but NEVER EVER actually delivering ANYTHING. History will judge him, along with his predecessors, as being a massive failure!!@!

  • Vincent Britz says:

    Just more lies from the face of the ANC gang!! They are nothing but criminals that will never pay for the corrupt, thieving crimes they have committed!! That’s just the way they have destroyed everything of SA, even the legal system!

  • Denise Smit says:

    If there is one fundamentalist, it is Nxezi totally uncompromising !!! Denise Smit

  • Denise Smit says:

    Mathews Parks is the spokesperson for Cosato. They have chosen well because he comes over as controlled and moderate. But that is everything but what Cosato is. Totally uncompromising and destructive. Just think of how uncompromising they were about the negotiations around the salary increase of government employees which is unaffordable for Treasury. Our government is bankcrupt. Just think about what damage they are doing in Tswane to infrastructure and the environment. They are the thorn in the government side – but the government feeds on their support, unfortunately. How can Parks think that today we can afford to subcidise R600 additional grants while we are also needing to pay the R4 billion per month to run the generators. How are we going to fund the increase of the national grid. How the NHSI which government insists on implementing. Nobody at government can do sums, thinking that us the small number of taxpayers who are leaving the country in droves have money coming out of our bely buttons. Denise Smit

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