I don't think it's properly appreciated how difficult it is to run a business in South Africa. While power outages are the most obvious challenge for both small and large businesses, there are many other hurdles, from navigating employment regulations to ensuring prompt payments to suppliers, including governments. And if you rely on trading goods across borders and are at the mercy of logistics systems, doing business has become considerably more difficult than last year.
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Five years ago, in the President's first State of the Union address during the sixth democratic administration, the importance of improving the business environment was cited as a top priority. At the time, the president pledged to work with social partners to reduce regulatory barriers to small businesses and build an ecosystem that supports and nurtures entrepreneurs. However, in last week's State of the Union, there was little mention of the importance of improving the business environment. Unfortunately, it has disappeared from the agenda.
Little is visible from the president's red tape. Despite being established several years ago with the purpose of smoothing the corporate experience, the president made it stand out two years ago that the department aims to “improve the business environment for all companies.” Despite this, it was not mentioned in the speech. size”.
While some regulatory reforms have eased the burden on businesses, particularly tax incentives for installing solar PV and allowing large companies to build their own power generation capacity, overall business management has become increasingly It's becoming difficult. Skills are becoming increasingly difficult to find thanks to the declining performance of the education system and the loss of skills overseas. On the day of the talk, new draft regulations regarding rare skills visa regulations and the proposed digital nomad visa system were announced. These are welcome, but although the new visa regime has been a priority for years, it is still several months away from coming into force. Meanwhile, companies looking to hire skilled foreigners will face months of delays. The Home Office has thousands of unprocessed applications and the backlog is only accumulating. Imagine how your business would be affected if a key person needed for a new production line or engineering project was unable to report to work due to visa delays.
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Crime and corruption are also a worsening challenge for business, with construction mafias and business forums extorting businesses across the United States. These are serious cancers that permeate the entire business environment and require joint attention from businesses and governments. Tackling crime and corruption is a key work stream in business and government partnerships to address our most pressing challenges. The president made tackling crime and security a top priority, while focusing on increasing police numbers. What we urgently need, however, is to significantly improve the performance of criminal intelligence, investigation, and ultimately prosecution.
Businesses have adopted a very pragmatic approach to addressing challenges to the business environment. We have worked with government to marshal resources to support a range of interventions, from intensive efforts to improve the performance of major rail lines to the remediation of Eskom's plants. We work with people who want to work with us to make a difference.
The difficulty for the president is that many in the government don't actually want to make the necessary changes. Resistance to implementing needed reforms, whether from ideological resistance or vested interests in the status quo, is a problem throughout government. The Office of the President's Operation Brindlera is an effective intervention to advance reform and ensure its implementation. Still, while the president's speeches are often imaginative, he is also resistant to stagnation when it comes to translating his vision into reality.
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Ultimately, the president needs a cabinet that shares his vision for reform and is committed to swiftly implementing it.
When reforms are hit by delays, it is often simply because decisions are not being made and bureaucratic processes are not being driven. There may be many reasons for this, but in many cases a lack of political will at the top of the department appears to be a contributing factor.
To address many issues, we need to focus on improving the business environment. It is the key to allowing businesses to establish and grow. Growing businesses create jobs and taxable revenue that can make a real difference to entire countries. We at BLSA are fully committed to promoting this.
Busi Mavuso is South African Business Leadership CEO.