South Africa has entered a decade where SA’s longstanding challenges have been exacerbated by the Covid-19 crisis. In addition to the financial and social strains of the pandemic, SA still needs to overcome historic hurdles that put us on the back foot during the lockdown. These include the slow pace of government reforms; the skills-readiness of our workforce to gain employment in Fourth Industrial Revolution (4IR) jobs; the devastating effects of rapid climate change in a country already gripped by drought; and an energy crisis that is straining our economy.

The 6th annual Director’s Event, presented by the Sunday Times Top 100 Companies and futured by BCX, took place online recently, where these issues were debated and brainstormed, and potential solutions recommended.

Sunday Times editor, S’thembiso Msomi said President Ramaphosa needs to be brave in forging ahead with actions to establish SA as an economy that investors can once again trust. However, to achieve that will take commitment, hard work, and the co-operation of both the public and private sectors.”

SA is poised for a future where our fundamental industries will be revolutionized, and it is imperative that we harness this innovation,” said Mandisa Ntloko-Petersen, chief marketing officer at BCX, adding that those companies that embrace innovation will thrive rather than merely survive.

Chairperson’s report for 2020

Delivering the chairman’s report for 2020, Wendy Lucas-Bull, chairman of Absa Group Limited discussed what it takes to do business successfully in SA and what is required to drive our economy forward. To address SA’s downward spiral requires drastic changes in the composition and efficacy of government spending. What matters most now is a clear response plan that all stakeholders can support and a relentless focus on its implementation underpinned by a credible accountability framework.

The journey towards an economic recovery, she said, will require a socio-economic compact between government, organised business, labour and civil society. In the short-term, there are a number of low hanging fruits which could help to arrest the current downward spiral, including reforming state owned entities into efficient economic growth drivers; ensure a stable supply of electricity in a liberalised market; a review of regulatory frameworks to facilitate digital migration and release much needed spectrum; amending SA’s visa regulations; and easing regulatory red tape for small businesses. In the medium to long term, unemployment needs to be addressed and the state’s capabilities bolstered while infrastructure projects with multiplier impacts need to be prioritised.

Saving Eskom a collective effort

Delivering the keynote address, Andre de Ruyter, the group CEO of Eskom said if the power utility fails it will have dire consequences on SA. He acknowledged concerns around rising electricity tariffs but said that there was no avoiding the fact that electricity would be costing more in future.

Eskom has identified a number of priorities to put the business on a more sustainable footing, including a focus on maintenance, the quantity and quality of coal, reducing its headcount, addressing its debt challenge, restructuring and recovering a culture of excellence. He concluded by saying he alone could not fix Eskom and that it would require a collective effort.

How to revive an economy in ICU

The first panel discussion focused on strategies to revive the economy and included Professor Ruth Hall, professor of Poverty, Land and Agrarian Studies at the University of Western Cape; independent energy expert Ted Blom; and Tebele Luthuli, MD of Business Against Crime.

The big issues emanating from the discussions were that the Covid-19 pandemic had become a humanitarian and food crisis, exaggerating structural inequalities. A basic income grant was one suggested solution. The high cost of doing business in SA – exacerbated by the growing cost of electricity – needs to be addressed, and the power grid needs to be opened up to households to self-generate. Other solutions include reform of labour regulations and better capacitation of the NPA, Hawks and SARS in order to create a more capable state.

The biggest takeaway from this discussion, said Ntloko-Petersen, is the need for collaboration. “There is no question that an economic recovery will require a collective effort combined with effective policy and a sustainable energy supply,” she said.

Managing climate change to become self-sufficient

The second panel discussion focused on how SA needs to manage climate change in order to become self-sufficient. The panel included Tasneem Essop, executive director of Climate Action Network International; Dr Inga Jacobs-Mata, country representative for the International Water Management Institute, Southern Africa; Kekeletso Tsiloane, the founder of Ramtsilo Manufacturing & Construction; Shamini Harrington, vice president of climate change at Sasol; and David Nicholls, chairman of the South African Nuclear Energy Corporation (NECSA).

The main take-outs were that SA cannot afford not to be concerned about climate change given that it’s not just an environmental issue but also an economic and social issue. We need to implement an inclusive process to enable a just energy transition. A climate change programme done right will lead to better development and better growth. However, while there has been progress in terms of policy evolution and development there is a lack of technical capacity to implement, as well as a disconnect between climate change and development goals. The argument for nuclear energy as the only viable alternative to coal was not accepted by all the panellists, many of whom called for a bigger focus on renewable energies.

4IR and jobs

The final panel discussion of the day put the spotlight on how the Fourth Industrial Revolution (4IR) will create jobs and grow the SA economy. The panel included Professor Brian Armstrong, adjunct professor at the Wits Business School; Dr Michael Gastrow, director for Science in Society at the Human Sciences Research Council’s Impact Centre; Gur Geva, the founder and CEO of iiDENTIFii; and Shaheen Vawda, chief sales officer at BCX.

The big take-outs from this discussion include the fact that SA does not have the luxury of time and needs to urgently embrace 4IR technologies in order to harness potential opportunities and become globally competitive. However, SA’s IT infrastructure has room for improvement. We urgently need to ensure that the youth and those in marginalised areas have access to affordable data and we need to build science and technology skills for the 4IR. Connectivity is the biggest challenge facing the country, and is something that risks growing the current digital divide.

From a business perspective, digital transformation is a journey rather than a destination, and one that can’t be focused on cost cutting but instead needs to be focused on top line growth.

Tangible areas to create jobs going forward are to build labour consuming platforms (like Uber and AirBnB); build more globally traded resources; and create a vibrant hub for the application of emerging technologies in an emerging market context – and then scale them up for export.

The Institute of Directors South Africa (IoDSA) has partnered with The Director’s Event since its inception. An event of this nature is even more important in a difficult year, said IoDSA CEO, Parmi Natesan. “It is in times of crisis that companies need their directors more than ever to steer them through choppy waters. It’s also in times of crisis that we realise how inter-connected business, society and the environment are – having either a positive or negative impact. Certainly, there is no question that business has an impact on our social and environmental capital.”

She added that boards need to be directing their companies to survive and thrive. However, this can only be achieved if the legitimate needs and expectations of stakeholders are taken into account.

To watch the web-conference, click here.