In March, our country went into one of the hardest lockdowns in the world – that is, we restricted most civil liberties to help contain the spread of the novel coronavirus (otherwise known as Covid-19 or colloquially as covivi) – which plunged SA into a historic humanitarian and economic crisis.
A few months after this hard lockdown, which supposedly helped prepare our frail health infrastructure, the government announced measures to cushion firms and households from the harshest effects of the lockdown – namely, stay at home (avoid school, varsity or work), wash your hands regularly or, if you can, sanisitise them, wear a face cloth or mask in public and keep a social distance in the absence of an effective and safe vaccine.
From empirical and official research and hundreds of surveys, we now know that as many as 2.2m South Africans lost their jobs during the second quarter of 2020 – or the first financial quarter for those looking at government finances. If we accept, as the Small Business Institute has estimated, that 98.5% of all formally registered businesses are small and medium enterprises (SMEs), then we have to extrapolate that the bulk of the 2.2m South Africans who have lost their livelihoods were employed in this segment of the economy. Worse, if we take other research, unemployment has hit Africans and African women the hardest.
Simultaneously, our worst fears were confirmed: that is, with the incapable state much of the R500bn in socioeconomic relief measures went to wasteful or fruitless expenditure. News media and official records have now confirmed our worst fears; that some have helped themselves to this relief package. The pain has been especially sharp for those of us, including yours truly, who have been advocating for black business to have a slice of the pie.
It is within this context that President Cyril Ramaphosa made his address last Thursday to the joint sitting of parliament, the National Assembly and the National Council of Provinces. Having moved the country to alert level 1 – meaning the economy is substantially reopened (still with a midnight-to-4am curfew, restricted international travel and restricted alcohol sales) – last month, Ramaphosa on October 15 2020 then announced elaborate measures to “reconstruct and recover” our economy.
We welcome these measures. Most of them make (common) sense. For example, it’s common cause that infrastructure investment is by far the most effective tool for economic development – done properly (meaning infrastructure investment not for its own sake) it can buoy mass employment, crowd in private sector investment and promote local economic development.
We echo the government’s sentiment that meaningful expression of this means application at local development – that is, at municipal as well as district level. Which brings us to the next issue – already, our government has a policy of a 30% set aside for local economic development.
Given our history of rolling out massive infrastructure development programmes, we need to be fastidious about what this means exactly. I propose the following: this should mean – first, we source skills and products from a local municipality; second, if these couldn’t be found there, then we widen the search to district and ultimately the province; and third, in the unlikely event, none of these could be found in the province, we have to source them from the rest of SA or the sub-region (an impossibility, we have proven during Covid-19).
For me, this means localisation at work.
We also welcome the mainstreaming of cooperatives and SMEs as enshrined in the president’s plan. It’s long overdue.
However, this needs elaboration for avoidance of doubt. In my humble opinion, this means the following: minimally, it would be grossly negligent to ignore the recent lessons (as late as covidpreneurs).
First, we know, from existing multibillion infrastructure projects – in rail, transport, energy and water and sanitation – that these projects are breeding grounds for massive corruption (a subject of the Zondo commission of inquiry). Second, and most depressing, we also know that most of these noble projects notoriously run over budgets and timelines.
To mitigate these afore-referenced risks, I propose the following: first, these must be broken down to manageable chunks for small black businesses; and second, oversight must be co-owned at local and district level by all stakeholders.
And finally, while the president’s plan is potentially transformative, if there’s no significant black participation in it – say, renewables, cannabis and new spectrum – it’s doomed to end in tears.
• Zungu is the owner of AmaZulu Football Club and founder of Zungu Investment Company.
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