By Sipho Pityana, chairperson of Izingwe Capital
Three years ago, I assumed the role of the president of Business Unity South Africa (BUSA) – a role that ends in July 2021. I served my term at a time that required particular clarity of purpose. We are emerging from the ravaging era of state capture, when some in business were knee-deep in corrupt and unethical practices. There was an air of expectation that, under the leadership of President Cyril Ramaphosa, with the rhetoric of the “new dawn”, that a nation committed to honouring its historic mission of building an equitable society was back on course. The African continent, which had suffered several setbacks and had once again receded to an obscure place in the developmental agenda of the world, had to reclaim its place.
As the business community, we had to assert our commitment to ethical leadership and an inclusive growth agenda that does not reproduce the country’s historical patterns of inequalities. Importantly, we had to ensure that the principles of collaboration with our social partners were more than just about securing the best deal for business, but would also improve the prospects for sustainable, transformative development. We had to earn a place as a credible voice at the table, even when others sometimes disagreed with our perspective.
Our priorities as a confederation of business organisations that represent over 90% of organised business in South Africa, and as a leader on the continent, had to align with those of society at large. We let the nation know that business not only had confidence in the future of our country, but could also proffer solutions that included economic and structural reforms. This came at the same time as we agreed on short-term interventions to address the seemingly intractable challenge of unemployment through a pact concluded at the Jobs Summit of 2018. However, success was always predicated on the agreement on critical structural reforms to be led by the government.
Importantly, we have had to play our part in ensuring that we drive a green economy and the Fourth Industrial Revolution (4IR), which we consider economies of the future. South Africa’s newly developed Integrated Resource Plan (IRP) places much greater emphasis on renewable energy and envisages a just transition away from fossil fuels. Business has to bring its tremendous resources and innovation to bear to drive the climate change agenda. We are all the poorer that these fundamental changes are excruciatingly slow to come about, even though it is encouraging that some are beginning to see the light of day.
We are seeing a more realistic approach to addressing the country’s energy challenges, and there are some encouraging signs of a more pragmatic approach to our state-owned enterprises. Although at times it has seemed that these policy changes have had to be squeezed out of government, the fact remains that change is happening and with it, the prospect of policy certainty and economic stimulation.
Closing the trust gap between business and society
We come from a place where trust levels between business and labour, and to some extent business and government, were very low. We have had to work very hard to close this persistent deficit in the interests of our country. Some of the agreements we entered into go a long way towards emphasising our embrace of the issues affecting the marginalised. Notwithstanding a barrage of criticism, we brought business to the party in support of the national minimum wage. We are a business leadership forum that is not about a chase to the bottom. We believe not only in the dignity of work, but in work for all.
When I look at this and many other features of my tenure at the helm of BUSA and listen to the articulation of the notion of stakeholder capitalism by Larry Fink, the CEO of Black Rock, our journey has had all the hallmarks of the expected role of business in society. And yet, we must admit, we have a long way to go. As we rightly show tremendous enthusiasm for the climate-change agenda, we must ask ourselves whether we can be trusted with the environment when we show indifference to the daily pain of race and gender discrimination and the condemnation of many – our brethren – to the indignity of poverty and homelessness. Only when we honestly address these issues will we truly close the trust deficit between business and society.
Purpose during the pandemic
The vision of purpose-led business carried us through the Covid-19 pandemic, and I would like to commend those in business who rolled up their sleeves to be part of the solution. To our great disappointment, though, there were many rogues who persisted with vile and corrupt pursuits. They must stand condemned.
We must reflect on the affirmative interventions by many in business. Our members were galvanised into action. Mining companies were out offering their health infrastructure for public use. Some, including motor manufacturers, built emergency hospitals. Many ran public education programmes and employee support initiatives. They distributed sanitisers, water tanks, masks and other essentials to communities. Interim relief measures were introduced by banks and companies for those with rent obligations. Other businesses employed similar measures to support vulnerable customers.
It was on the back of this sense of citizenship that BUSA, together with the Black Business Council, established Business for South Africa (B4SA), to coordinate our three-pronged response focusing on pharmaceutical, behavioural and socio-economic interventions. We tabled a detailed long-term recovery plan for the country after the pandemic.
This platform was established to enable a nimble, agile and expeditious business response, free from the mandate-driven processes of organised business. Through these processes, business has asserted itself as a trustworthy and reliable partner beyond profiteering.
Very few would be aware that the Solidarity Fund was our brainchild. Through it, about R3-billion was raised to kick-start the procurement of personal protective equipment and other emergency responses. By the time government initiatives were announced, these programmes were well under way.
Today, business has partnered with the government to enable the procurement and local manufacturing of vaccines. We have made our private-sector facilities available to enable the speedy roll-out of vaccines. I am alluding to this to emphasise the point that, during the three years of my tenure, we repositioned BUSA to afford business the status of a partner in search of sustainable solutions to the country’s and continent’s challenges. We have graduated our relationship with society beyond the transactional to one of an independent but reliable partner. We are not about dishing out leftovers after we have been successful, which is how corporate social investment (CSI) is sometimes perceived. We believe the success of our country and people will enable businesses to thrive sustainably. It is for this reason that we are driving an agenda for inclusive growth, founded on meaningful social compacts.
Partnering with other African countries
In pursuing this vision, we are at all times cognisant that we are a small player in a globalised economy. Many of our businesses are linked to the global value chain that may be driven by different values and ambitions. Nonetheless, our responsibility to bring to bear the perspective of underdeveloped and, in particular, African economies was always going to be the burden that we carry.
Africa’s individual 54 countries all battle with limited skills pools which, if shared, could be a continental resource but for our restrictive immigration policies. Most of our economies, as Africans, require social and economic infrastructure that is critical for development. The multiplier effect of such makes for greater economies of scale. Country populations are often way too small, with limited purchasing power, and so free movement of goods and services makes for markets with the requisite critical mass.
Many potential investors in our transport infrastructure, including rail, port, road, air and so on, are keen on the linkages that include those countries that may be landlocked. Hence, the Southern African Development Community is a greater developmental proposition than just South Africa.
Our support for the African Continental Free Trade Area agreement was driven by these considerations, with its enactment and ratification by the majority of countries on the continent, including South Africa. South Africa is one of the more developed economies in the free trade area. We have to play a more visible role in assisting its successful implementation for the mutual benefit of all countries on the continent. We have to unlock our markets to intra-African trade if we want to be successful in penetrating global markets.
In 2019, I assumed the chairmanship of the World Economic Forum’s Africa Regional Stewardship Board. Through this, I hoped to mainstream Africa in these annual conversations of global business leaders that shape world economies – a tall order in an environment where the continent is rarely referenced in the majority of deliberations. One of the key endeavours in this regard was the founding of the Africa Growth Platform, whose mission was to drive an agenda for sustainable small and medium enterprises on a continent that is dominated by these but lacks support. Helping these organisations to partner with multinational corporations and linking them to supply and procurement chains was part of that journey. There can be no inclusive economic agenda without small and medium enterprises.
With the Covid-19 outbreak, the establishment of the World Economic Forum’s Regional Action Group for Africa helped coordinate our efforts on the continent. This work benefited country-specific efforts as well as helping envision strategies for economic recovery.
From forced to happy marriages between social partners
The real issue is not what we have achieved – it is how we ensure that we do more. We need to maintain the partnerships that have helped us navigate the economic and pandemic whirlwinds. We need to increasingly strengthen the chain of trust that has been built between labour, government, business and society. We need to continue our focus on inclusive economic growth, particularly given the devastating unemployment statistics that present the bleakest of futures for young South Africans. And we have to continue with the macroeconomic reforms that are gradually providing policy certainty for local and foreign investors.
In some ways, the combination of economic and pandemic whirlwinds created forced marriages between us as social partners. We need to convert these forced marriages into happy ones, where partners are glad and enjoy working together for the betterment of our country and the continent. It is inconceivable that we can succeed in a sea of failing and collapsing societies. We must be part of the solution. We need to take up our full citizenship as business – which is not just about enabling enterprises to make a profit, but also about ensuring that we help societies to work successfully. It cannot be that we sleep peacefully at night with a large number of young people desperate for jobs.
- This is an abridged speech delivered by Sipho Pityana at the Trialogue Business in Society Conference 2021, which was presented in partnership with Absa, Momentum Metropolitan Foundation, MTN SA Foundation, Rand Water Foundation, Vodacom, Capitec Foundation, Sibanye-Stillwater and Volkswagen South Africa.
- For more about the Trialogue Business in Society Conference, visit https://trialogue.co.za/businessinsocietyconference/.