Business associations play a vital role in thriving democracies as they promote economic growth, effective policymaking and good governance. We explore how South African business associations collaborate to achieve their goals and drive development in the country.
When the controversial National Health Insurance Bill was signed into law in May 2024, Business Unity South Africa (BUSA) indicated it would consider legal action as the bill was “unimplementable and damaging to the country’s healthcare sector, the economy more broadly and investor confidence”. In September, President Cyril Ramaphosa agreed to meet with BUSA to discuss its objections – a fact that suggests we are in an era of greater cooperation between government and business.
The government’s willingness to engage comes at a time when greater collaboration is being viewed as the country’s way forward. The Government of National Unity brings a new spirit of cooperation and compromise and a generally better working relationship with the private sector – a long-awaited positive development. However, BUSA CEO Cas Coovadia says: “We must assess this on an ongoing basis so that such relationship does not detract from our role of calling the government to account where necessary.”
At the BUSA Annual General Meeting in August 2024, President Ramaphosa indicated that public-private partnerships are vital for the efficient delivery of services. “We need partners who are going to point out in a positive and practical way where the gaps are,” he said. “Your job is to … make us do the right thing for the sake of our economy.”
He added that the success of the partnership “depends on active and continuous engagement, even in areas where we don’t agree” and said policy disagreements should not “deter us from the work we need to do”. He remarked that we can only rebuild by leveraging our collective resources.
The private sector as a catalyst for change
Collaborative partnerships have played a significant role in South Africa’s history and the private sector has been at the heart of many of these partnerships.
From assisting in the transition to democracy to protecting health and fighting hunger during the Covid-19 pandemic, business has provided funds, resources and advocacy at critical moments, working alongside other stakeholders. The Consultative Business Movement played a major role in funding and facilitating the transition to democracy, while Business for South Africa (B4SA) – an alliance of South African business volunteers – used its experience to mobilise business resources and capacity during the pandemic (See ‘B4SA: A case study in collaboration’ on page 109).
As the largest federation of business organisations, BUSA has frequently facilitated collaboration among its member associations on various issues. As a member of the National Economic Development and Labour Council, BUSA has played a major role in facilitating social dialogue and building consensus on key economic and social issues. In 2019, the Public-Private Growth Initiative was launched at a BUSA indaba to revitalise the economy.
The South African Chamber of Commerce and Industry (SACCI) has a long history of collaborating with other business associations on issues such as trade, investment and economic policy. The Business Coalition for Climate Action and NBI have brought businesses from different sectors together to mitigate climate impact and promote sustainable development.
The private sector has made significant contributions to the country’s success and stability, and it continues to be regarded as South Africa’s most competent sector, according to the 2024 Edelman Trust Barometer.
The recent turnaround in the country’s fortunes has been partly due to the collective efforts of the private sector, which is supporting the government to tackle national challenges that include energy, transport and logistics, and crime and corruption.
The role of business associations
Business associations represent the interests of various industries and sectors, providing a unified voice for business and advocating for policies that promote economic growth, job creation and social development. “They allow us to present a more cohesive, coherent, united front when meeting other stakeholders,” says Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA).
Some of the key roles of business associations include:
- Sector development, where they promote the development and growth of their respective industries through skills development, enterprise development, market research and industry standards. Businesses often collaborate on sector-specific initiatives to enhance the competitiveness of entire sectors. The Association for Savings and Investment South Africa (ASISA) runs a programme that focuses on black-owned small and medium enterprises (SMEs). It provides funding and business development support, focusing on businesses with the potential to grow and create jobs. The NBI runs a programme with technical vocational education and training (TVET) colleges to improve the quality of education and employability of graduates, driving enterprise development by aligning skills development with the industry needs (also known as ‘demand-led skilling’), improving the quality of the workforce available to business, and supporting the growth of technical industries. The South African Institute of Chartered Accountants Thuthuka Bursary Fund helps to produce more qualified accountants from disadvantaged backgrounds and supports the growth of black-owned accounting firms.
- Promoting trade and investment by organising trade missions, creating market opportunities and facilitating business-to-business meetings. BUSA has organised numerous trade missions to international markets, creating opportunities for South African businesses to expand their exports. It has also worked to attract foreign investment to South Africa by highlighting the country’s competitive advantages.
- Advocacy and policy influence by actively engaging with government officials, policymakers and regulators to influence legislation and policies affecting the business environment. This can have positive and negative effects – for example, advocating for policies that support economic growth, reduce red tape and create favourable business conditions, or opposing certain labour or environmental regulations, such as carbon taxes, advertising restrictions, or delaying the implementation of public health measures. Examples include the Beverage Association of South Africa opposing the introduction of a sugar tax in 2018, arguing it would hurt the economy and cost jobs, or the Minerals Council South Africa (MCSA) advocating for the mining industry in South Africa, engaging with government officials and policymakers to influence legislation and policies affecting the sector, particularly around sustainable mining, mine safety and competitiveness.
- Driving social and corporate responsibility by promoting ethical business practices, contributing towards sustainable development and supporting community development programmes. Business associations also collaborate with government agencies on public-private partnerships such as infrastructure development or social programmes. BUSA, SACCI and BLSA have all been involved in initiatives to promote sustainable development and have collaborated with the government on public-private partnerships and social programmes.
How business associations can foster collaboration
Business associations can foster collaboration in South Africa by leveraging their unique position to unite often very different stakeholders, including businesses, the government and civil society, and devise innovative ways to solve complex socioeconomic challenges.
Key collaboration strategies for business associations include:
- Establishing multistakeholder partnerships, drawing in the nonprofit sector, researchers and other organisations to respond to crises in specific ways. During the pandemic, BUSA, through its B4SA platform, collaborated with the government, NPOs and public health experts to safeguard the lives and livelihoods of South Africans, proving that broad-based cooperation can achieve meaningful goals.
- Promoting public-private dialogue and policy advocacy can improve policy design, promote innovation, drive economic growth, enhance governance and regulatory reform, and ultimately deliver social impact. BUSA’s collaboration with Operation Vulindlela focuses on structural reforms that can improve the business environment, such as improving infrastructure and addressing regulatory bottlenecks.
- Facilitating knowledge sharing and capacity building can be done in two ways – industry forums, where members can share best practice and learn from one another’s experiences, and training and development programmes that help members improve their skills and knowledge. NBI holds regular workshops and conferences on topics such as water risk and collective action. It has convened CEO Roundtable discussions, green economy dialogues for businesses that explore sustainable business practices, skills development forums to discuss skills development strategies and partnerships between business and educational institutions, and SDG workshops. Its Energy Efficiency Leadership Network events share best practices and discuss energy-related challenges, and its transformation and social cohesion dialogues promote inclusive economic growth and address social inequalities.
In 2022, the Department of Science and Innovation and the Mandela Mining Precinct (MMP) launched the South African Mining Extraction Research, Development and Innovation (SAMERDI) research centre to focus on the longevity of mines and advance orebody knowledge, among other things. The SAMERDI strategy was implemented by the MMP and co-funded by the MCSA to help modernise the mining industry and ultimately create jobs. In 2024, SACCI collaborated with Absa Group on the inaugural Absa-SACCI Women-in-Business Directors Training Programme, to identify and nurture women with the potential to excel in board roles.
Challenges to collaborating with the government
While business associations have laid a good foundation, acceleration is needed, particularly as regulatory compliance prevents the government from being agile. “BLSA had hoped that the Electricity Regulation Amendment Bill would have been passed in November 2023, but it was only signed in May 2024. Implementation is not always at the pace we’d like to see,” says Mavuso.
She says 80% of BLSA’s current work focuses on capacitating the state. “We can’t achieve the more than 3% gross domestic product (GDP) growth we need without a capable state,” Mavuso points out. However, she adds that there is a thin line between capacitating and influencing the state, and the latter should be avoided. “If one company had deployed 20 engineers to assist Eskom, it could have been accused of state capture – but if business works as a unit intent on closing delivery gaps, for example, it gives us legitimacy.“
Other challenges include the fact that the government is not always receptive to private sector expertise and may not implement the resolutions taken – but Mavuso believes there will be greater buy-in from the government as the partnership’s successes become apparent. Both Coovadia and Mavuso believe the private sector needs to be more vocal about government accountability. “Our partnership isn’t about hugging and singing ‘Kumbaya’,” says Mavuso. “When the government is doing well, we will give the president kudos, but we will also highlight problems.”
Coovadia says the current partnership will work as long as business has a credible interlocutor in the government who is prepared to work with the private sector. “The president has consistently done what he has set out to do,” says Coovadia, but not everyone in the government is as receptive to working closely with the private sector.
“The NHI is a case in point,” says Coovadia. “Health minister Aaron Motsoaledi wasn’t open to discussing the Bill, but the president has been willing to talk. The government is not homogeneous – we have struggled to make headway in Gauteng, for example, because we’re unsure who we should talk to.”
How business associations can foster collaboration among their members
Business associations foster collaboration among members in the following ways:
- Setting up local networks to promote the development of regional and provincial business groups to address local challenges and opportunities. Both the Cape Town Chamber of Commerce and Gauteng Business Forum represent local businesses and focus on job creation, skills development, infrastructure improvement and promoting tourism.
- Managing joint programmes between members, for example, NBI’s installation, repair and maintenance (IRM) programme, a joint initiative with partner companies, focuses on technical skills for the renewable industry and ASISA’s enterprise development programme brings member companies together to fund the development of small businesses in the sector.
- Organising information sharing and networking events to connect business leaders and using online platforms, including social media, to connect members and share information. BLSA hosts council meetings approximately every six weeks – the council is the entire membership of BLSA, represented by their CEOs and chairpersons. BUSA convenes regular online sessions of its members on various topics, including competition policy, energy, skills and other relevant topics.
Companies should actively participate in industry and business association forums to share and learn from one another. In turn, business associations should foster collaboration among their members to improve collective problem-solving, increase bargaining power and improve operational efficiency across the industry. Such collaboration can also see a more rapid development and adoption of innovative solutions for society. By working together, companies and business association members can help to develop and promote sustainable practices that will ultimately improve our country in the long term.
NBI: Collaborating for long-term transformation
Unlike B4SA, which exists to fill service delivery gaps and extricate the country from a national crisis, the NBI focuses on long-term, sustainable development. The independent business movement consists of close to 100 South African and multinational member companies and focuses on social transformation, economic inclusion, environmental sustainability, and institutional and government capacity building.
“There are a few areas concerned with the social transformation and sustainability of the country in which business needs to play a role,” says NBI CEO Shameela Soobramoney. “We have a vision of what the long-term future should look like, and we reverse-engineer this into our projects.”
The voluntary coalition of companies works with other entities to achieve ambitious outcomes. It partnered with BUSA and the Boston Consulting Group (BCG) to launch its Just Transition Pathways Project, a collaborative effort championed by 30 CEOs across various sectors and aimed at mobilising cross-industry collaboration towards a low-carbon economy. It also created a unified voice for South African business at COP26, held in Scotland in 2021. Soobramoney said around 400 stakeholders in government, business, industry associations and civil society were involved in the project, the aim of which is to drive the necessary shift to a low-carbon economy.
The NBI is developing initiatives to make young South Africans more skilled, employable and entrepreneurial. This is an offshoot of the Presidential Youth Employment Initiative under the banner of ‘IRM skills’. The NBI has Memorandums of Agreement with more than a dozen TVET colleges to deliver demand-led skills development programmes. These programmes develop pathways for young people to access IRM occupations wherever such artisanal skills are relevant (e.g. appliance maintenance, property sector, renewables, etc.).
In April this year, endorsed by the Just Energy Transition Project Management Unit (JET PMU) in the Presidency, and partnering with BCG, it launched the JET Skilling for Employment Programme which aims to support the skills needed to power the transition and understand what jobs will be needed – where and in what time frames – over the next decade and longer. “If we are to ensure that a transition is just and allows for the localisation of value chains and growth of SMEs, we need to be deliberate and focused in our effort,“ says Soobramoney.
Supported by over two dozen CEO champions from various sectors and working with the JET PMU, Presidential Climate Commission (PCC), Department of Higher Education and Training (DHET), relevant Sector Education and Training Authorities and others, the initiative released its first report in late October. The report, titled Powering Futures: The Green Skilling Opportunity, offers leading insights at a granular (municipal) level as to what skills will be needed where and when, and will be the basis for recommendations on initial efforts to deliver the transition.
B4SA: A case study in collaboration
Cas Coovadia, the outgoing CEO of BUSA, says business associations have not diverged from their mandate – to represent business in different forums, both locally and globally, advocate for an appropriate legislative, policy and regulatory environment, and promote economic growth – but capacitating the government, both during and after the pandemic, entailed doing something different.
“During the pandemic, we established Business for South Africa – an alliance of South African business leaders working with the South African government and other social partners – to mobilise business resources and capacity during the Covid-19 pandemic. We mobilised not just BUSA members but all business associations and CEOs.”
B4SA partnered with the government to work quickly and flexibly, on a project management basis, to help save lives and livelihoods. It provided essential support to businesses and communities, including distributing information about government regulations and health impacts, providing financial assistance and advocating for policy measures to mitigate the economic impact of the pandemic. It also helped ease some of the supply chain disruptions that led to a shortage of essential goods and raw materials and played a critical role in the distribution and provision of vaccines.
“A couple of years after the pandemic, we approached the government to see if it was interested in partnering on other pressing issues,” says Coovadia. “Although we suspended B4SA after the pandemic, because we had achieved our objectives, we saw the potential of using the platform once again. We made it part of our mandate to provide resources and expertise that would advance the interests of both partners and increase business confidence among investors.”
B4SA has been tasked with supporting the government to address bottlenecks impacting economic growth and social development, focusing on three priority areas: energy, transport and logistics, and crime and corruption. The partnership was contracted between BUSA and the government and is a focused initiative with clearly identifiable time frames and deliverables. The BUSA board decided to utilise the B4SA platform to undertake this work, with a broad mandate and regular report-backs to the board.
B4SA’s project management approach allows us to work quickly to avoid lengthy regulatory processes, but good governance and reporting are essential. Martin Kingston, the Executive Chairman of Rothschild & Co, chairs B4SA’s steering committee, and around 15 CEOs from different companies attend meetings with the Presidency every six to eight weeks, according to Coovadia. He adds that BUSA board members Adrian Gore, Mxolisi Mgojo and Mavuso also serve on the steering committee, with himself as the BUSA CEO designate.
“We use the B4SA platform to raise funds from companies specifically for the partnership – this is over and above how members fund BUSA, which is the contracting authority administering the funds,” Coovadia explains. Funds are mobilised to capacitate the government – but if the government’s commitment were to wane, and there was reputational risk to business, the BUSA board would review the partnership.
It is not a multistakeholder partnership largely because it has focused on crisis interventions, but Coovadia says there is no reason why the two most trusted sectors in South Africa today – business and NPOs – should not enjoy a more structured relationship that can bring about greater change.
Mavuso says the amount of progress made in energy and logistics would not have been achieved without business coming to the party. However, there is still significant work to be done. “Our most critical task is to build an inclusive economy that generates sustainable growth, creates jobs and eradicates poverty. Such effort requires collaboration with all our social partners,” she notes.
“Our initial rudimentary calculations indicated we could save billions simply by averting load-shedding, improving ports and rail performance, and tackling crime and corruption,” Mavuso says. The suspension of load-shedding since 26 March 2024 is testament to the partnership’s efforts to stabilise the grid.
She admits there is a limit to what the private sector can achieve in the area of crime and corruption, since “companies can’t prosecute”, but a key aim includes capacitating the National Prosecuting Authority, with which BLSA has a memorandum of understanding, allowing for the flow of skills and resources to the embattled organisation. Another aim is to dismantle the parallel economy caused by organised crime. Business, through Business Against Crime South Africa (BACSA), is working closely with the National Priority Committee on Extortion and Violence at Economic Sites and has recently issued guidelines on how construction firms can respond to extortion, for example. In addition, BACSA has partnered with the South African Police Services, the Private Security Industry, and members of the private sector on the Eyes and Ears Initiative.
B4SA’s next steps
Coovadia says the next task the private sector will help to tackle is reducing unemployment, although its ability to do so depends on the extent to which significant GDP growth can be achieved.
“At first, B4SA resisted expanding beyond the three specified priority areas – there’s always a danger that you’ll end up expanding into 30 areas and achieve very little,” he says. “However, the President is very passionate about employment, so we’ve put together a separate structure with the Presidency, Department of Labour, Department of Small Business Development, DBE and DHET to set about reducing youth unemployment. There are a number of organisations already engaged in this, such as the Jobs Fund and Harambee, and we want to scale their efforts.” B4SA will once again report directly to the president.
Other critical areas that could receive attention in the future include the water crisis and municipal capacity. “The second phase of our partnership was launched in October 2024, and we are discussing whether it will be possible to intervene in these areas. We can only do so if we have the resources and capacity,” Coovadia points out. He believes that by the end of 2025 the government should be sufficiently capacitated to institutionalise the skills and knowledge currently being transferred. “It’s not business’s job to continuously support government – it’s just not healthy,” he says.
Source: The original version of this article was published in the Trialogue Business in Society Handbook 2024 (27th edition).