Private sector assistance in public sector matters requires clear and concise objectives – BLSA

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CEO of Business Leadership South Africa (BLSA) Busi Mavuso asserts that clear and concise requests from the public sector or government go a long way in helping the private sector plan and implement initiatives to address business and societal issues, while vague and open-ended requests do little to mitigate problems.

“I spend a lot of time discussing with other social partners how companies can best work with government and others. I learned that there are effective ways to get positive results, but there are also ineffective ways that disappoint everyone,” she says.

An example of how the public sector has positively asked for help from the private sector is the CEO of Eskom André de Ruyterrequested assistance in late July to help the utility increase generation capacity or improve power generation in South Africa.

“What made it easier for us was that [De Ruyter] establish clear and precise pathways [to address the situation, such as] companies [being able to] lease land they own to independent power producers [IPPs] and sign power purchase agreements with producers so that they can present their projects to banks and other lenders to raise funds,” explains Mavuso.

Following this, she says, the private sector business community convened a meeting to discuss how to move the demands forward. “We are working with agricultural chambers of commerce to look at suitable land that can be made available to IPPs.”

Additionally, Mavuso says, broadcaster Multichoice has agreed, in principle, to support an energy-saving marketing campaign to the public.

“We are working with several business partners to determine how we can support the safety and security of Eskom’s infrastructure. These will lead to practical and positive results,” she adds.

The second example of how the private sector aims to help the public sector is to support the criminal justice system. “The rule of law is essential for business; it ensures that our counterparts are trustworthy and allows us to be part of the global business community,” says Mavuso.

“We are keenly aware of the exceptional damage to the criminal justice system caused by state capture.

“We have long worked to fight crime through our subsidiary Business Against Crime, and now we work with the National Prosecutor’s Office [NPA] to ensure it can access the skills it needs from the private sector to support prosecutions, from forensic accountants to lawyers,” she says.

In this regard, BLSA has signed a Memorandum of Understanding (MoU) to ensure that any support is appropriate and protects the independence of the NPA.

This partnership with the NPA also has clear and specific ways in which the private sector can help, aligning with broader private sector goals, Mavuso says.

The Memorandum of Understanding signed by BLSA and NPA allows organized companies to mobilize the skills of the private sector to help them in complex cases.

However, in contrast, public sector demands that the private sector cannot do anything about are those that are usually vague and open-ended demands from businesses. “For example, we are often told that companies should invest more or employ more people. Such requests, by themselves, are of no use,” she explains.

“The conditions under which companies will invest or hire more people are not a mystery.

“There needs to be a change in the opportunities for businesses in the economy, opportunities that allow them to grow without taking undue risks. This is why we often talk about structural reforms, which are changes in the way the economy works to improve its efficiency and change the risk/return outlook for businesses,” explains Mavuso.

A good example is the amendment to the Electricity Regulation Act, which allows companies to generate electricity without a licence. This triggered billions of rands of investment, she says.

“This change works because it changes the outlook for businesses and allows them to put capital at risk to build and grow.

“But requests in which there is no change in the proposed outlook, just a request for expansion, don’t make sense,” says Mavuso.

The private sector would be able to do more together if these fundamentals were better understood, she says.

“I am more than happy to engage with government to point out issues that limit businesses and prevent them from investing and growing.

“Together we can work on solutions that will result in more investment and jobs. But investment and employment cannot be a starting point, they must be a result,” says Mavuso.

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