Article Written by Ian Kilbride.
Having recently returned from grey London and the UK, I was mindful of the customary warning on the Tube and how its mundane, monotone, repetition loses urgency and impact. Coming home, it struck me how deep and challenging the gaps are in South Africa and yet we seem not to be heeding the warnings.
Among others, I am concerned about the ‘gap’, which is more akin to a chasm, between government and business. This was illustrated most starkly in the countervailing pronouncements coming out of this week’s Mining Indaba in Cape Town.
How can it possibly be that South Africa now ranks as one of the ten least attractive mining destinations globally? The annual Fraser Institute survey is sent to some 2,000 mining, exploration and development companies globally and in its latest results, we come out 75th out of 84 jurisdictions. It makes you wonder why the Mining Indaba it still held in South Africa, but then again, Cape Town remains one of the top ten tourist destinations globally. Therein lies the story of contemporary South Africa. On the one hand, we are squandering and failing to maximise the value of our unique endowment underground and yet on the other, we are making more use of our natural beauty as a tourist destination. But why not do both?
One major reason is the failure of government to understand business, as was evidenced in the speeches made at the Indaba. Government appears to operate under the misapprehension that simply because we are abundantly endowed with mineral resources, that this will translate into economic growth, national wealth, investment and job creation. More than this, government’s mind set is that if you regulate enough, you will achieve the desired outcome of empowerment, redistribution and tackling inequality.
From my own years of experience in establishing and growing businesses, I accept fully the need for appropriate regulation, but I have never encountered regulation that propels growth, creates sustainable jobs and generates broad-based wealth. And this is the message towards which the government appears to be tone deaf: stop over-regulating business.
Rather, listen to business and acknowledge just how good, innovative and wealth accretive South African businesspeople are IF you allow them to be entrepreneurial. To return to the Mining Indaba, we are blessed with the world’s most precious minerals resources, being extracted by some of the world’s leading mining houses. Given the critical role mineral resources play on the global economy and the unique role they will have in the green economy, such as in battery technology, it is time that the South African government takes a sober look at the mining premiership table and does everything possible to avoid our relegation. But as a quick and easy starting point, just get out of the way and let us win!
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