President Cyril Ramaphosa announced a radical policy shift to put the private sector at the centre of economic recovery and enable business to thrive by cutting red tape. Photo: Jaco Marais/South African Pool
THE GOVERNMENT has given the business sector much-needed certainty of getting the economy going again by setting a final 1-month deadline for ending all restrictive Covid-19 regulations.
This comes as President Cyril Ramaphosa announced a radical policy shift to put the private sector at the centre of economic recovery and enable business to thrive by cutting red tape.
On Friday the Cabinet announced that it had approved the final extension of the National State of Disaster to March 15 as some of the key departments dealing with Covid-19 had not yet concluded their analyses.
Ramaphosa already indicated in his State of the Nation address (Sona) on Thursday that the national disaster would end once measures to manage the Covid-19 response were in place.
South Africa has seen the worst of the Covid-19 fourth wave driven by the Omicron variant come to pass, and the number of new cases have been moderate enough for easing restrictions.
This announcement means that the government could bring to an end one of Africa’s longest-running Covid-19 lockdowns after two years of stop-start economic activity.
However, a degree of non-pharmaceutical measures such as wearing masks in public, physical distancing and sanitising of hands is expected to continue for the foreseeable future.
Business Leadership SA (BLSA) chief executive Busi Mavuso has said ending the state of disaster was a good move.
“It won’t happen immediately as other measures under the National Health Act as well as other legislation need to be finalised,” Mavuso said.
“But it’s important for businesses to be able to operate at full capacity.”
Business has been lobbying the government to lift all restrictions for a long time although most restrictions to social and economic activity have already been removed.
Old Mutual chief economist Johann Els said this announcement was a positive move for business confidence after economic growth was hampered by the Omicron variant in December.
Els says businesses can make plans for workers to return to the office as the return to normality is on the horizon.
“It creates more certainty and will gradually help boost business confidence. There is going to be more certainty that we will be able to manage Covid with existing measures,” he said.
Els also said that Ramaphosa’s Sona signalled to investors that the government was prepared to work with the private sector to rebuild the economy in spite of all upside risks posed by loadshedding and political upheaval.
Ramaphosa emphatically said that the government does not create jobs, business creates jobs, and the government’s task was to create conditions that enable the private sector to thrive.
“Sona was very business friendly in terms of statements made, but that needs to be followed up by action,” Els said. “Ramaphosa’s statement about the government creating a conducive environment stands out as one of the most positive statements I have ever heard from a president.”
Business has been lobbying the government to allow more private sector participation in the economy and improve the ease of doing business in the country.
Ramaphosa finally acceded on Thursday, appointing the chairperson of the Small Business Institute and former Exxaro Resources chief executive Sipho Nkosi to head up a team to cut red tape across government.
The team will also work with other departments and agencies to unblock specific obstacles to investment and business growth, simplifying processes relating to property registration, cross-border trade and construction permits.
Alan Mukoki, the chief executive of the SA Chamber of Commerce and Industry, said a private sector led economy will finally set the country on a path of science-based planning.
Economic indicators for January have already shown that business confidence lifted at the beginning of the year driven by increased trade and retail sales, and that business expectations for the next six months were high.
Investec chief economist Annabel Bishop agreed that business would only thrive if the state moves out of the way.
siphelele.dludla@inl.co.za
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