‘Business forums” — specifically referring to groupings who use criminal tactics, force and violence to access business opportunities — are a huge threat to the economic sustainability and future of Durban. The current effects are simply catastrophic and show no signs of slowing down. As violence and criminality go unchecked, they have proved a successful method and are employed by more and more people on a wider scale.
The gradual descent of business in eThekwini into the realms of thuggery and chaos is a result of the ANC-led government’s policies and actions. There is a clear link between the “business forum” crisis that has gripped the city, the politics of the day and the real impact that this mess is having on our economy. Under the guise of “radical economic transformation”, eThekwini Municipality has drastically extended the reach of the municipality in municipal procurement.
The effects cannot be overstated.
These forums emerged in 2016 in eThekwini, the same year that Zandile Gumede was elected as eThekwini Mayor. The city does not currently research and keep data on their activities and how they have impacted our economy. We have suggested that they do. The municipality needs to carefully track exactly what is happening and what the cost is.
The construction industry has been hammered over the past two years and has shrunk considerably. Covid-19 and the subsequent lockdowns were undoubtedly a key reason, but the constant “work stoppages” and chaos have affected almost every single big project in the city. Smaller operators, who often don’t have the money for the court interdicts and private security needed to stop this interference, are also badly affected.
A system of preferential procurement — which basically allows deviation from normal supply chain management principles and procedures where they align with “transformation” — has been widely used and abused. Under the guise of localising procurement and employing local labourers on local projects, councillors and municipal officials have become middlemen in allocating who does what municipal work and where they do it. The line between what is lawful and what is not has been blurred, often deliberately.
In 2018, I was approached by an ANC councillor who wanted to know if I knew if he was to be arrested by the Hawks in the DSW tender saga. It was a bizarre and jarring conversation. When I explained why the arrests were happening and what was unlawful, he casually mentioned that “everyone is involved in the sub-contracting”. It has become almost expected that it is the scope of the work of local politicians to facilitate work for contractors.
National Treasury has cautioned that this kind of localised procurement should not be happening. In 2018, they put out a circular to caution that certain provinces were abusing preferential procurement frameworks to ring-fence contracts in certain geographical areas. eThekwini ignored this warning and no one ever enforced it.
The net result is that the boot of politicians is firmly on the necks of business and everybody is feeling the pressure. Legitimate businesses are stifled, threatened and forced to divide up their work with selected subcontractors. The culture has grown so drastically that it is now common practice and openly accepted that this chaos is simply part of life in eThekwini.
eThekwini Mayor Mxolisi Kaunda has spoken out strongly against these forums but real, tangible action is desperately needed. The municipality has established an office to liaise with business forums which does not really seem to be working.
The real action required is a solution for business owners and managers: what do you do and where do you go if your work is stopped and your staff threatened? Who is coming to assist you? I have repeatedly suggested a helpline where those affected can log issues and receive guidance and assistance. It is critical that all available municipal and government resources be pooled to help those who need it and get businesses working and construction going.
eThekwini is in serious trouble. Our municipal infrastructure is failing on a massive scale, our rates base has flatlined and the city is in urgent need of development and an injection of capital. A business-friendly environment that is able to attract investment and revitalise the economy is the city’s only real hope of recovery.
The acceptance of chaos and violence as a business instrument by the state was the inevitable result of its own policies. The ANC gradually increased the ability of officials and politicians to interfere in business and say who did what and where. This was enthusiastically embraced by those it suited, and here we are.
This is now a crisis on a scale that is not even being properly measured. There are solutions, but they require political will and a principled commitment to free-market values, transparency and merit.
The risks of not attending to this situation cannot be overstated. This is a city in trouble. DM