An Article By Ian Kilbride, Published on 28 March 2024 in The Daily Maverick.
Regardless of the May 29 general election result, two issues are clear: economic growth will be the new government‘s primary challenge; secondly, given the abject failure of existing economic policies, new and innovative approaches are needed.
A maverick, but not so radical proposal is for the establishment of a Ministry for Business and Economic Growth, together with the appointment of an appropriately experienced businessperson as its head. While novel, the idea is not unique. New Zealand, for example, has a Ministry for Business, Innovation and Employment, which encompasses the areas of building and energy, employment, immigration and tourism, science and technology and plays a transversal role across government. Of course, the phenomenon of businesspeople entering politics is also nothing new. Cecil John Rhodes, Harry Oppenheimer, Zach De Beer, Herman Mashaba, Alan Winde and of course President Ramaphosa, have all excelled in business and politics.
We also have the precedent of then President Mandela appointing SA Breweries Chairman, Meyer Khan, as Chief Executive Officer of the SA Police Service in 1997. But establishing a new Ministry headed by a business leader would be brave, innovative and provide a fillip to the business community and potentially the economy more broadly.
To date, government stewardship of the economy has been underwhelming. The June 2019 amalgamation of the Department of Economic Development with that of Trade and Industry (and Competition), has largely failed. And while laudable in intent, the Ministry of Small Business Development has not achieved meaningful success. Indeed, South Africa has one of the highest small business failure rates in the world, with five in seven failing within the first year. More broadly, relative to South Africa’s peers, local economic growth has lagged drastically. Stripping out the Covid lockdown and recovery period, from 2018-2023, South Africa’s GDP has averaged 1,2 percent. In 2018, 24 percent of the eligible workforce was unemployed. The latest figures record an unemployment rate of 32,1 percent. The current model is not working and requires radical rethinking at the policy and institutional level.
The logic of a businessperson heading a new Ministry of Business and Economic Growth is incontrovertible. Currently, the common thread running through the economic cluster Ministries is membership of, or former membership of, the South African Communist Party and/or trade union leadership. None has direct, firsthand, entrepreneurial business experience. With the notable exception of the State President, no member of cabinet has established or run a business. To the contrary, in ideological terms, the Cabinet economic cluster is largely antithetical to business by persuasion. Communists and trade unionists may be principled, competent and committed members of cabinet, but should not be running the economy.
The merits of the establishment of a Ministry for Business and Economic Growth headed by a suitably qualified businessperson are manifold. Firstly, such an office and appointee could and should be viewed as apolitical. Indeed, it would be desirable for the incumbent to be ‘above’ party politics. While the appointment of an accomplished and respected businessperson to cabinet may be anathema to some political parties, unions and civil society groupings on ideological grounds, the President has the constitutional discretion to appoint two ‘external’ Ministers to cabinet, rather than drawing from party lists. Indeed, this was the case with the appointment of DTIC Minister Ebrahim Patel in 2019 and Finance Minister Enoch Godongwana in 2021. Any post-May 2024 State President has the discretion to select and appoint a non-partisan, accomplished and respected business leader to lead the new Ministry.
Secondly, from a stakeholder perspective, the appointment of an experienced and respected businessperson to head the Business and Economic Growth Ministry would give the complex and diverse South African business sector a single Ministerial and Departmental focal point with which to engage, rather than the current disparate, siloed, and overly complicated configuration. This alone would significantly enhance not just business confidence, but also the ease of doing business in South Africa.
Thirdly, such a Ministry and appointment would aid better inter-departmental co-ordination and facilitate joined-up governance, particularly within the economic cluster. The absence of such joined-up governance has led President Ramaphosa to strengthen the centralising role of the Presidency itself, which, while understandable, leads to an over-concentration of power in what is becoming a super-Presidency.
Given the tectonic shifts currently unfolding in the party-political terrain, business has a rare opportunity to insert itself into the mainstream political governance debate, less on party political grounds perhaps, but rather with the broader national imperative of achieving a more progressive workable and successful institutional arrangement with government. It is perfectly legitimate for business to propose and lobby for the establishment of a Business and Economic Growth Ministry and to recommend its founding incumbent.
So, who might business look to as a suitable candidate? Several names spring to mind that have enjoyed highly successful business careers and who may also be politically palatable to a broad spectrum of political parties. Patrice Motsepe, Lazarus Zim, Mark Barnes, Fani Titi, Maria Ramos and Kuseni Dlamini all fit the bill and, while they may not be grateful to be nominated, each would be broadly welcomed by the business community. Retiring BUSA CEO Cas Coovadia is another whose professional, business and organisational experience would be broadly welcomed. Similarly, BLSA CEO, Busiswe Mavuso, is someone who would bring considerable drive and organising energy to such a new Ministry.
The country is desperately in need of innovative thinking and boldness by politicians and business leaders alike, so, perhaps there has never been a better time than now to respond to the nation’s Thuma Mina call?