TIC 2017: South Africa’s shortcomings are not easily addressed

Traditionally, the second day of the Insurance Institute of South Africa’s Sun City conference is predominantly about painting the socio-political environment within which the insurance industry operates.

This year’s conference was no exception. The main speaker of the morning session was Jabu Mabuza, who is a Chief Executive at Telkom, and was once tasked by the former Finance Minister Pravin Gordhan to bridge the gap between business and government on key issues.

Policy wars

While normally positive and full of life, Mabuza lamented the current state of the country saying that it is failing on a number of key issues.

The first and possibly most important issue, where South Africa is currently falling short, is that of its policy making.

“South Africa has a long history of good policy making where government, labour and the public sat down with each other and engaged in an open and honest manner about the policies that need to be implemented in the country. Unfortunately, the current dispensation is failing the country. Policy frameworks are being drawn up behind closed doors and serve a political agenda rather than serving the people. Government is ignoring evidence and good practice principles,” said Mabuza.

Monopolistic thinking

Most economies follow a free market principle where competition is encouraged as it caters for the public’s freedom of choice and freedom of association. While this is the case in many aspects of business, monopolies do exist when it comes to public services.

“The state of our state owned enterprises is deplorable,” said Mabuza, “these companies are deeply indebted and are constantly turning to the public to bail them out. And as we have seen recently, tax payer money is simply not enough to achieve this.”

He then discussed the controversial topic of white monopoly capital, “while not the cause of all our ills, the issue of white monopoly capital needs to be addressed. We have huge companies who have deep pockets and wide business networks, how can a small black business that is starting on its journey compete with these companies? We need to find a solution to this, and in a proper way. We have forgotten where we come from and who we are; the current rhetoric in the market is very nasty, and no good can come from us standing on opposite fronts hurling insults at each other,” said Mabuza.

The way forward

The issue about monopoly goes beyond business models, it is about monopolistic thinking. It is about our mind-sets regarding the state of society. “South Africa has always been a country of the haves and the have not’s, it is up to us to take a step back and ask if this is acceptable or if we are going to do something about it,” said Mabuza.

He then went on to define the roles that need to be established in the country, “It is the duty of the white people to share their wealth and their knowledge; and it is the duty of the black people to create jobs and fight unemployment,” said Mabuza.

A changing order

Mabuza’s talk was interesting and did leave the audience with some food for thought. But the problem is far deeper than what Mabuza spoke about. South Africa needs to change its thought pattern when it comes  to spending and investing.

Junior Ngulube, CEO of Sanlam Emerging Markets, said that South Africa’s association with debt needs to change.

“We are entering into a new world order which has a different association and relationship with money. Mabuza pointed out that South Africa is a land of the haves and the have not’s. It is when the populace suffers that we see extreme views coming to the fore. This is when populations rise up against their government and elections result in change,” said Ngulube.

This is possibly a better time than ever to have a national debate about our economy and the role that indebtedness is playing in it. Ngulube points out that government knows that the economy is driven by debt, but then it takes out more debt to resolve this issue. It’s like giving alcohol to an alcoholic telling him that it will be the cure of his ills.

Editor’s Thoughts:
The actions to address these challenges are difficult to implement if society does not put up a united front. While many may feel Mabuza was jumping onto the convenient bandwagon by discussing white monopoly capital, he has a point; we cannot change this country while hurling insults at each other. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].

Comment on this Post

Name*

Email Address*

Comment*

 

Submit Comment