Trust and interdependence will breathe life into sustainable economic growth and investment

October 25th, 2021

South Africans’ resilience goes hand in hand with the adversity that generations have faced before us. Since the advent of democracy, South Africans haven’t let up in overcoming seemingly impossible circumstances. We have battled against the spread of HIV/Aids, we have fought to eradicate pit latrines in schools, and daily, millions of people continue to confront the poverty and inequality that has left them without access to opportunities and hope.

Our country is in an emotional, economic and political triage zone. The Covid-19 pandemic quickly flung into sharp relief the enormous and widening gulf between those South Africans with means, and those without. Now, suffering from the highest general unemployment rate in the world at nearly 40% and with 40 000 businesses reeling from the wanton destruction which took place in Kwa-Zulu Natal and Gauteng in July, it’s no surprise that our people and economy are struggling. We need immediate and practical solutions to jolt our people and economy back to sustainable life. And we have to start this operation by stitching back together the tattered trust between government, business and civil society.

We need to confront the undeniable reality that our fragility means we are more interdependent than ever before. Right now, instead of digging deep into a siloed approach to inclusive economic growth where government prescribes the supposed conditions for business to operate, and business continues to battle against red-tape and rules that stifle innovation, we need to create space and freedom to responsibly trade and grow.

The good news is that there are immediate interventions available that can quickly unlock opportunities for growth across the formal and informal economy. Each of these interventions will move us closer towards a more trusted and certain interdependence in the tough months that are no doubt still ahead.

First, we need to contain the threat of Covid-19 infections and improve our national vaccination uptake. The vaccine hesitancy and apathy that is setting in is a direct limitation to our growth, and puts foreign direct investment at risk. The United Kingdom for one has kept South Africans at bay and UK tourists at home with its restrictive quarantine requirements. It has made great headway with its vaccination programme – almost two-thirds of the UK population are jabbed. In most places in the UK, you no longer need to wear a face mask or practice social distancing. And while they are still experiencing high infection rates, the vaccine has considerably decreased Covid-19 hospitalisations. This has lowered their death rate and has helped preserve the health of their human capital. This has had the additional effect of enabling greater organisational resilience within places of work.

Here at home, we need government to continue promoting trust in vaccines through its Vooma Vaccination Weekends and more, aiming to vaccinate 70% of all adults before year end. Business and civil society should also play its part in helping one another get vaccinated. This can be as simple as encouraging staff to take their permitted time off for vaccinating, and offering transport to the nearest vaccination site. For large employers, or those in remote areas, it could even extend to hosting a Health Department vaccination drive at their premises.

Secondly, we need to help businesses embrace e-commerce and the opportunities provided by technology. This starts with government speeding up the allocation of spectrum as a priority; not forcing providers to implement ‘data load-shedding’ as recent reports indicate. Banks also have a role to play in making technological solutions more accessible. The hard-hit hospitality sector has a clear need for better access to the latest digital point of sale systems for instance. Digitalising eateries and spaza shops in the informal sector, in particular, would mean better stock management, an ability to identify and analyse customer trends, and a safer way to transact with and build trust within their communities. This would all help to stimulate our township and broader economies.

Capitec is an exciting mover in this space and is one of the fastest growing banks in the world with 17 million customers. They are now expanding their offering and expertise from retail to commercial banking. By examining how Capitec, and other banks, can use their user base and new service offering to provide discounted solutions to taverns, cafes and spaza shops, we can bridge the digital divide and repair our socio-economic fractures.

Third, we need to save as many ailing businesses as possible. Up to 600 South African businesses have gone into liquidation in peak months throughout the year, and our business rescue success rate is languishing below the 10% mark. All of these businesses – and the hard-working people behind the enterprises – deserve better. With trusted and astute expert interventions, businesses large and small that find themselves in financial distress could leverage existing assets, access available finance from banks or government, understand their market better, and pivot to more sustainable business models.

Part of this success includes awareness of support that is available through government. Vice-President David Mabuza recently unlocked an additional R2.3 billion for small, medium and micro enterprises affected by the unrest in Kwa-Zulu Natal. We need to ensure that all affected SMEs have the opportunity to apply for and access these funds which have been ring-fenced for their survival.

And finally, we need to look at the individuals who make up our diverse society. We need to look at our places of work and take a proactive approach towards fostering organisational resilience. We are operating in a hostile environment in which a mutating virus, and its cohort of variants, cause waves of rising infection rates every nine weeks. The consequences of climate change are being felt, and our employees have undergone impactful life changes in the past 18 months. We are not the same people we were when 2020 began.

We’ve confronted our demons before, and we can do it again. We can do it by leaning into our interdependence but we simply have to start trusting one another to pull together.

Adam Craker is the CEO of IQbusiness, South Africa’s leading Level 1 B-BBEE independent management and technology consulting business.

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