Business leaders have said they will do their best to ensure that retrenchments are avoided for as long as possible and have proposed measures to the government that could boost confidence in the economy, the CEO Initiative said on Tuesday.
The CEO Initiative consists of leaders of top 40 JSE-listed companies who were among a delegation that included labour, which met President Cyril Ramaphosa, deputy president David Mabuza and several ministers at the president’s Economic Consultative Forum last week.
The forum was assembled to find solutions that can boost SA’s weak growth which is expected to be less than 1% for 2018 following a surprise recession in the second quarter of 2018 and address the high unemployment rate, which is sitting at 27.2% and an expanded rate of 37.2%. The expanded rate includes discouraged job seekers.
The forum was convened ahead of the government’s jobs summit, scheduled for October 4-5 and the investment summit running from October 25-27 this year.
Jabu Mabuza, co-convener of the CEO Initiative said at last week’s meeting that business had heeded labour’s calls for retrenchments to be avoided “wherever possible and ensure that burdens are fairly shared between managers and workers”. In situations where retrenchments were unavoidable, support and re-training to enable workers to seek alternative employment was important.
But Mabuza added in his statement that “Periods of economic distress, such as that which our country is experiencing now, often require employees and business leaders to do more with fewer resources and make sacrifices over the short term, in order to build stronger businesses and a more efficient government that works for all its citizens”.
This comes as speculation that the redesign of financial services firm Liberty may lead to job losses. Unnamed sources said executives “had been dropping hints of impending retrenchments”, Business Report reported on Tuesday, to which Liberty responded that realignment was intended to improve efficiency. It declined to comment on job implications.
Mabuza said at the meeting that business leaders also proposed the following measures to try and improve on confidence in the economy:
• A focus on fiscal consolidation and stabilising sovereign debt levels
• Strengthening institutions that have been weakened and supporting Chapter 9 institutions;
• Addressing policy incoherence, particularly in mining, land and health, as well as underlining respect for the rule of law through consistent action in relation to transgressions; and
• Driving greater efficiency and productivity, both in the government and the private sector.
A statement from Ramaphosa’s office on Sunday said the president had provided an outline of the economic stimulus package to business leaders. Finance minister Nhlanhla Nene will provide further detail in the medium-term budget policy statement on October 24.
The package will include a “defined set of economic reforms covering issues such as mining, telecommunications, tourism and transport”.
Proposals to establish an infrastructure development initiative that draws on private-sector funding and delivery expertise were also discussed, the presidency said.
Ramaphosa indicated that the stimulus package would re-prioritise government spending within the existing fiscal framework, towards activities that stimulate economic activity.