Last week, I attended a Zoom discussion (as you do!) hosted by Howard Sackstein of the South African Jewish Report. He brought together a distinguished panel of seriously influential businesspeople and asked them all the same question: “What would you say to the president if you had 2 minutes of his time?”
I thought I’d share a few of my favourite answers you (edited for flow and brevity) and also give my own two cents worth. One thing’s for sure, the President is navigating an extraordinarily complex scenario. There’s far more to it than booze, jogs and smokes!
Philip Krawitz, founder of Cape Union Mart
Mr President, my first step would be to privatise with passion. We need the revenue to pay back our debt. With R650 billion worth of debt, one-fifth of our tax revenue will go towards servicing debt – this is the same amount we spend on education. The solution is to privatise, get the loss-making SOEs out of our way, and use the money to repay the debt.
Next, I would abolish all BEE preferences on state tenders. To be able to compete, the state needs to buy at the most competitive level from the best suppliers. To keep the spirit of affirmative action going, we should introduce a differentiated tax rate, with those businesses with a higher BEE component paying less tax.
Step number three, please stop tampering with our wonderful constitution. Take expropriation without compensation off the books. Threatening to change the constitution is freaking out local and international investors.
And finally, allow all online traders to sell everything online. We need the tax revenue. It will keep people out of the malls and off the streets, and it will allow businesses to thrive and create the jobs we so desperately need.
Colin Coleman, former CEO of Goldman Sachs
I would start by sincerely thanking the President by his leadership. Then I’d advise him to take advantage of having the whole country behind him (this doesn’t often happen) to stabilise the economy by opening it up in a smart manner. This means working out where it makes no sense to put bureaucracy ahead of the economy and where it doesn’t. Opening up online delivery services or allowing the export of alcohol would have no negative impact on the health pandemic.
Then I’d move on to restructuring the economy. We don’t want to go back to where we were before the pandemic. One of our biggest problems is the sky-high public sector wage bill. What’s more, there is no way we can continue with vanity projects like building a sovereign wealth fund. Obviously, the National Health Insurance is going to be a massive debate going forward. We’re also going to have to look at something like a universal basic income grant. This is something that the crisis has forced all economies to investigate and we’re seeing many economists rethinking the distribution of resources in the economy.
We also need to look at the whole question of technology, a topic that I lecture on at Yale. This crisis has supercharged the growth of tech businesses like Zoom, Amazon and Netflix. But it also has the potential to accelerate the use of technology in the public sector. Government should push the use all the things that can already be done online (E-filing, passport applications, paying traffic fines) and we should transform our health and education systems to embrace technology. We need high quality delivery of public services, and tech is a big part of the answer.
The final thing I would say to the President is that he needs a wider set of skills around him. He shouldn’t only rely on skills coming out of the ruling political party, especially at a time like this. Now is the time to draw on the private sector in a truly dynamic way.
Stephen Koseff, former CEO of Investec
We need to get the economy out of lockdown in a sensible manner. Some elements could be opened up with very little risk, including online delivery. We must also increase our support of vulnerable people and vulnerable sectors of our economy. We’re going to need our domestic airlines to function when the virus has passed, so we should prop them up in the same way we supported the financial sector in 2008.
When this is all done, we need to build a business-friendly economy that’s focused on growth. At the end of the day, it’s only growth that will create employment. We need to teach people to fish, as opposed to giving them fish.
There needs to be a massive commitment to infrastructure, but this should be done in partnership with the private sector. Public-private infrastructure partnerships can work exceptionally well, including toll roads and Independent Power Producers.
We really have to sort the SOEs out. Quite frankly, I don’t think the state has the capability to run businesses. If SOEs are not functioning, they need to be sold or closed. Hurry up with the unbundling of Telkom and encourage private sector generation of electricity. There’s loads of new technology that we can adopt to generate electricity.
Lastly, the government should start handing over title deeds wherever they can. We need massive investment in social housing and to change the way society lives. And we have to focus on education and teaching people to fish.
Nazmeera Moola, Head of Investments at Ninety One (Investec Asset Management)
I’d talk to the President about making life easier for small to medium-sized enterprises – a particular passion of mine. One look at the Ease of Doing Business Index shows the scale of the problem. In 2008 we were 32nd in the world, and last year we were 84th! Our worst scores were for registering properties with municipalities, dealing with construction permits, and enforcing contracts.
If I were the President right now, I would get every bureaucrat who is currently on full pay to go through all of the regulations that govern businesses in this country and figure out how to make it easier for small to medium-sized businesses to operate. We need to get all those businesses operating as quickly as possible.
The second thing I’d address is the unsustainable fiscal expenditure. This starts with increasing the transparency of spending. R20 billion has just been allocated to the health response to this emergency and another R20 billion to municipalities. It goes without saying that next year we’re going to have to experience some kind of tax increase to pay for this. This tax increase would be a lot more palatable if people believed that the money was well spent and cleanly spent and achieved the aim that was required. After all, we’ve been through in the last decade, it’s no surprise that there’s very little confidence in the government’s procurement policies.
That said, over the last few weeks, the President has generated an enormous amount of confidence in his capability. It’s wonderful to be so far ahead of many places, including the UK and the US. We need to use this confidence to translate into positive and sustainable economic growth.
My two minutes’ worth
As for me, if I had two minutes with the President, I’d talk about the importance of pulling in the expertise from the private sector. There are loads exceptionally talented and experienced business people who can bring modern, progressive perspectives to the table. Starting with the people interviewed by the SA Jewish Report. They’re all busting to help…Constructive, caring, and progressive. Why wouldn’t you take them up on the offer?
Now, it’s your turn… I’d love to hear what your advice to the President would be and I’m sure your clients would too. At times like this, everyone wants to be reassured by people they know and trust and what better way to do this than to send out a newsletter?
Founder and owner