Three things Ramaphosa should suspend now to improve GDP-growth

“The GDP-growth contraction of 3,2% in the first quarter of 2019 is a government-made disaster. It reflects rational economic behaviour in the face of irrational government policies.” So says Piet le Roux, CEO of independent business organisation Sakeliga.

“When a government spends its time speaking about expropriation, implementing race-based procurement, and levelling the economic playing field by making business equally difficult for everyone, rational people think twice. They think twice before investing, they think twice before consuming, they think twice before paying tax, and – as we’ve seen recently – they start to think about emigration.”

“President Cyril Ramaphosa’s new dawn is in serious need of tangible action for businesses on the ground. That is, not in new commissions, new ministers or new government departments, but in the urgent suspensions of harmful legislation, policies and debates. Either through his influence or by the powers vested in his office, here are three ways in which President Ramaphosa could bring immediate relief to the South African economy:

Suspend race-based pre-qualification of contractors at state-owned enterprises

Start with Eskom, where businesses who are not 51% black-owned are today frequently pre-emptively disqualified from even being considered for award of a tender. Eskom is critically precluding electricity consumers in South Africa from the full range of cost-effective expertise available on the market and – it has to be said – signalling to white people that their contributions are not welcomed.

Postpone expropriation talks

Advise Parliament to postpone further consideration of the proposed amendment of the Constitution for Expropriation without Compensation. This proposal is creating massive uncertainty among local and international investors.

Start scrapping regulations, instead of adding new ones

Start doing it one-by-one. For example, repeal the recently proposed thresholds for short-term rentals (the so-called Airbnb Bill) and instruct the relevant minister to make the tourism business easier for everyone, including incumbents. Instead of levelling the playing field by making it equally difficult for everyone to do business, why not make it equally easy?”

Statement issued by Piet le Roux, CEO: Sakeliga, 4 June 2019