E-BUSA Bulletin APRIL/ MAY 2012
BUSA at the WEF in Ethiopia Business Unity SA (BUSA) will be represented at the African chapter of the World Economic Forum (WEF) in Ethiopia this month. This gathering will be held at the headquarters of the African Union (AU) in Addis Ababa. One can argue that it perhaps is fitting its held there – as the headquarters are symbolic of a centre where Africa comes together with a shared vision of achieving sustainable economic development, poverty alleviation and job-rich growth for Africa’s people.
According to the International Monetary Fund (IMF), seven out of the 10 fastest growing economies in the world can be found in Africa. Private equity firm Actis, which has a presence in Asia and Latin America, is aiming to invest $300 million a year in the continent's biggest economies, viz South Africa, Egypt and Nigeria. Other firms that have made headway into the BUSA CEO Nomaxabiso continent include liquor-giant Majokweni SABMiller, financial services companies Standard Bank and Absa, cellular providers MTN and Vodacom as well as auditing firm This gathering in Ethiopia takes place during a global Deloitte, to name just a few. downturn which saw larger economies look at robustly emerging ones. No doubt, the recession has also presented an opportunity for Africa to The African Development Bank estimates that demonstrate to the world why the findings of the African annual expenditure can reach US$2.2 trillion Ernst & Young's Africa Attractiveness Report, "It's by 2030 provided the continent sustains an average time for Africa", are not unfounded empty claims. annual growth rate of over 5%. Africa benefits enormously from, firstly, its natural comparative advantages, and secondly, the bank adds, from an Working with its members, the Corporate Council on already vast and growing middle class (with a total Africa, Business Africa as well as Brand South Africa, population already around one billion) that is driving BUSA has lined up a series of networking, promotion consumption. Countries on the continent recently and publicity opportunities on the sidelines of the have also been successful in implementing farWEF Summit. These include corporate roundtable reaching economic as well as political reforms, discussions, media face-offs and business-toadding to a more conducive business and investment climate. The gathering in Ethiopia will hopefully business meetings. These are themed around the expedite discussions to help enable a conducive infrastructure investment opportunities in Africa, the environment for private sector development and Africa tripartite free trade area (SADC, East African private sector–led growth. Also, to fast track reforms Community and COMESA) agreement currently to aid businesses of all sizes to flourish as growth under negotiation, as well as the outcomes of the engines. I concur with the IMF’S African Department recent BRICS Business Forum Meeting in New Delhi. Deputy Director Roger Nord who said in a conference that; “The key to accelerating economic development in Africa lies in harnessing private Figures show that with the global recession, Africa sector–led growth. And it is important because the has become a promising investment destination private sector is also the main source of future job where companies are making good returns. creation— and Africa needs a job-rich growth.”
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MEMBERSHIP
THE BLACK WOMEN ORGANISATION SOUTH AFRICA (BWOSA)
We welcome another new member to BUSA this month. BWOSA joins BUSA as an organisation representing small black women entrepreneurs. As the business community and our country grapple with the mammoth task of growing jobs and small enterprise development in South Africa, BWOSA’s joining our ranks adds a new and welcome dynamic to BUSA. Indeed, we look forward to their active and passionate participation in our structures, along similar lines to the passion and energy we have been exposed to when meeting the BWOSA office bearers. Eugenia Kula-Ameyaw of BWOSA
BUSA also welcomes the SA TYRE MANUFACTURERS’ CONFERENCE (SATMC)
ECONOMIC POLICY
National Development Plan (NDP)
On 13 April, BUSA submitted comments on the National Development Plan. As part of our recommendations to the department, BUSA welcomed the opportunity to engage with other stakeholders on South Africa’s economic trajectory. We urged the NDP to continue consultation and engagement into the next critical phases: implementation and monitoring. The Plan and the process of developing may foster social solidarity but this moment of collaboration and goodwill will be lost without concrete action to bring the vision to life. For this to happen, the government must take seriously the commitments in the Plan, making the hard choices and necessary trade-offs to do so. Amendments to the labour laws, restraint in public-sector wage hikes and “professionalization” of the civil service,
Trevor Manuel is the South African Minister in the Presidency for National Planning Commission.
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are among some difficult steps that the Plan mandates. BUSA is behind these proposals and looks forward to working with government to achieve them.
E-tolling On 16 April BUSA submitted comments to the Department of Transport on SANRAL’s draft regulations. Following the release of the proposed tariff schedule by SANRAL on 13 April, BUSA released a media statement outlining its key concerns regarding the implementation of e-tolling on 30 April and called for a delay until such time as the practical challenges and concerns of the public had been addressed. The 4 main issues outlined in the media statement included: BUSA found SANRAL’s regulations to be extreme, and placed onerous burdens on business. In addition the regulations are not aligned with existing legislation. There has been insufficient consultation with social partners to address concerns There is still significant confusion and uncertainty around the e-tolling system and Prof Raymond Parsons BUSA Deputy CEO
an inadequate account of the possible cost implications on the economy and its stakeholders Given the practical challenges and numerous outstanding concerns, BUSA wants a postponement of implementation and further consultation.
On April 28, BUSA welcomed the court’s decision to delay the implementation of Gauteng e-toll system. The decision by the court today provides an opportunity to review and revisit the approach to e-tolling and fully address the practical challenges surrounding the implementation of the system. It has been the view of BUSA that more time is needed to properly address the regulatory and cost implications of the e-toll system. BUSA hopes the time will be wisely used to engage constructively with key stakeholders on the concerns that have arisen around the implementation of e-tolling. In particular the cost of administering the e-toll scheme needs critical interrogation, as well as to explore supplementary funding models. Further engagement by the Department of Transport and SANRAL on this matter is needed in order to ensure that the final arrangements are more broadly acceptable.
Second annual EDD conference: Infrastructure and development
On 19 and 20 April this committee along with several representatives attended the Second Annual EDD Conference on Infrastructure and Development. The summit brought together representatives from the public sector, labour, community and business to discuss the infrastructure backlogs facing the economy. Broadly the conference was well-attended and provided interesting topics for discussion including, infrastructure and supplier industries, the financing of infrastructure, infrastructure and industrialisation, infrastructure, mining and beneficiation and the role of the public sector, private sector and civil
3 Ebrahim Patel Minister of Economic Development
society in taking infrastructure development forward. There could have been more discussion on the importance of policy coordination and cohesion with a plenary session on the alignment between the PICC, NDP and NGP. Overall, though the feeling from participants was that the dialogue has begun and it is now important that we all work together to bring government’s strategic infrastructure projects to fruition. Business and labour both indicated their willingness to engage on issues related to infrastructure development and delivery in order to improve the growth potential of the economy. A call was made by business to the PICC to open the forum to participation from the private sector in planning infrastructure. During April Econpol commented on the National Development Plan and SANRAL’s draft regulations (SANRAL Act, Act 7 of 1998 (Notice 252 of Government Gazette 35182 of 2012). The directorate will submit comments on the DTI’s manufacturing competitiveness enhancement programme and SANRAL’s draft first amendment to regulations regarding exemptions from payment of tolls shortly. The directorate continues its work on finalising the Nedlac engagements on spatial planning and land use management, AARTO and the National Transport Master Plan. Over the month of May, Econpol will work on consumer protection and public-private partnerships, as well as meet with SALGA.
SPECIAL ECONOMIC ZONES
On 22 March, BUSA submitted comments on the DTI’s draft policy and Bill on special economic zones. As part of our recommendations to the department, BUSA requested that the special provisions proposed for SEZs in terms of
electricity supply. If special economic zones are to succeed in South Africa they need to offer something that is not available elsewhere.
incentives and reduced redMinister of Trade Dr Rob Davies tape, be extended to all During March we commented on the special industries within the economy. We also requested economic zones bill. The directorate continues its that the department consider a larger role for the work on finalising comments on the National private sector in terms of identifying and developing Development Plan, as well as its engagement with economic zones. As part of a coordinated effort to Nedlac on various issues. Over the month of April, improve the competitiveness of the South African Econpol will engage work on comments to the economy, the policy and legislation for special manufacturing and competitiveness enhancement economic zones should avoid ‘picking winners’ and programme, spatial planning and land use be aligned to policies around cross-border management, AARTO, consumer protection, publicinvestment, youth unemployment, job creation and private partnerships and more broadly, labour market flexibility, infrastructure infrastructure and development. development, and the certainty of water and
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TRADE&INVESTMENT AND SPECIAL PROGRAMMES
BUSA AND AMCHAM
BUSA President Mrs Futhi Mtoba and AmCham President Donna Oosthuyse at the BUSA Board of Trustees AmCham Board of Directors Breakfast Meeting On Friday, 13 April, BUSA’s Board of Trustees held a breakfast meeting with the American Chamber of Commerce South Africa’s Board of Directors to discuss the South Africa – U.S. bilateral commercial relationship and to constructively look at policy areas for further cooperation. The BUSA delegation was jointly led by BUSA President Futhi Mtoba and BUSA CEO Nomaxabiso Majokweni. The AmCham delegation was jointly led by AmCham President Donna Oosthuyse and AmCham Executive Director Carol O’Brien. The honoured guest for the breakfast meeting, H.E. U.S. Ambassador Donald Gips, provided the group a comprehensive overview of the economic and political relationship between South Africa and the United States. Ambassador Gips reaffirmed the overall positive relationship between the two countries and highlighted the scope for greater cooperation. He reminder the group that perceptions of South Africa and Africa in the U.S. still lag in comparison to the realities of the progress the continent has made. He identified media as the key influencing factor shaping U.S. corporate leaders perceptions. The ambassador views the media challenge as an area where BUSA and AmCham can partner to inform U.S. business leaders of South Africa and Africa’s vision and its current progress. He also underscored the fact that South Africa is not where growth is on the African continent and that South Africa had to be strategic in how it promotes itself. Ambassador Gips noted that the African Growth Opportunity Act (AGOA) has been the cornerstone of U.S. and Africa relations. However, in the U.S., there is debate as to South Africa’s status in the U.S. preferential trade legislation, with voices insisting that South Africa be graduated out of the agreement. The ambassador stated that the doors are open for discussion on the matter. Similarly, on the topic of Iran sanctions, the ambassador informed the group that the U.S. and South Africa were in discussions on how to mitigate the economic impact these sanctions may have on the South African economy. Ambassador Gips noted possible areas of U.S.-South Africa cooperation as being: regional integration (single window) and advocacy on AGOA.
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ENERGY AND TRADE
ENERGY MATTERS
In April, BUSA members met with Minister Dipuo Peters and senior Department of Energy (DoE) officials at the offices of the DoE in Pretoria. The meeting discussed a number of issues which, in the main, fell under the broad thematic areas of: security of electricity and liquid fuels supply; the price of electricity; the role of energy policy in implementation of climate change white paper; and the price of liquid fuels. The meeting also represented an opportunity for BUSA and the Minister to mutually affirm ongoing collaboration between Business and the department – not only in relation to the issues discussed during the meeting, but in general as well. The meeting ended with an agreement to structured ongoing collaboration, and with a message from Minister Peters for BUSA to start considering, in that regard, inter alia: BUSA’s role in assisting in the IPP (renewable energy) implementation agreement and the roll-out of renewable energy; Business’ role as a driver of technology-mix advocacy in South Africa; and BUSA’s advocacy role within the Carbon Capture and Storage roadmap. A comprehensive report of the meeting has been circulated to members.
NTB Reporting Mechanism A meeting of the country focal points for the COMESA-EAC-SADC non-tariff barriers reporting mechanism took th th place on the 19 and 20 of April, in Dar es Salaam. The meeting represented the first thorough appraisal of the mechanism since it was officially launched last year. A year on from its launch, some of the initial concerns relating to mechanism have abated. The proportion of concrete resolutions of complaints has increased, and South African exporters and traders have become especially active users of the system. However, there remains room for improvement - and as the private sector focal point, BUSA continues to feed business’ concerns directly into the tripartite discussion, and through interactions with the governmental focal point (housed in the dti’s SADC Unit). On the sidelines of the Dar es Salaam meeting, country delegations held bilateral sessions with countries against whom their reported NTBs were still unresolved. The South African delegation, which comprised BUSA and the dti’s SADC Unit, held a series of these bilateral meetings. On the whole, these bilaterals were successful – each session ended with specific details of what action was to be taken in respect of every unresolved NTB. The reporting matrix has now been amended accordingly.
Members are encouraged to utilise the system and to disseminate information to individual traders and exporters. The website for the NTB reporting mechanism is www.tradebarriers.org (it can also be accessed via a link on the BUSA website).
Any comments and suggestions relating to mechanism may be sent to Ms Cynthia Chikura cynthia.chikura@busa.org.za .
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SAIIA, GIZ, SADC Project on Firm Level Non-tariff Barriers th
In a parallel process, the South African Institute of International Affairs (SAIIA) held a regional dialogue, on the 24 of April, on non-tariff barriers in the SADC region. The meeting, which took place in Harare, was part of a broader private sector dialogue - launched earlier this year by SAIIA, the SADC Secretariat, and German GIZ - which is aimed at identifying practical solutions within the broader policy discourse on the foremost business constraints in the SADC region. The project takes a case study approach (firm-level) towards gaining an understanding of the nature of the barriers which SADC exporters and investors face in each of the SADC member states. The idea behind this approach is to influence policy dialogue, through making it more fact-based. This is complemented by ongoing dialogue involving, inter alia: the private sector from the respective SADC Members; regional private sector bodies such as the SADC Private Sector Forum (formerly SEG) and the Association of SADC Chambers of Commerce and Industry; the SADC Secretariat (especially the Trade, Industry, Finance and Investment Directorate); the governments of the member states, and in particular, relevant governmental agencies within member states; Trademark Southern Africa (the current custodian of the tripartite NTB reporting mechanism). The ongoing goal of these engagements to present the findings of and proposals from, the process to decision makers in the SADC region.
Single Window and Rick Gurley th
On the 5 March 2012, BUSA met with representatives from USAID and SA Trade hub to hear about the “Single Window” trade initiative which seeks to streamline import and export procedures for the private sector. A Single Window is a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements traders go to only one location to submit their documents.
Rick Gurley and Gus Mandigora at a Tradepol meeting
As a follow up, BUSA invited the USAID representative Rick Gurley to the Tradepol meeting on 18 April to explain the “Single Window” concept to the Standing Committee on Trade Policy. The Committee can then make a recommendation on the desirability of the Single Window system for South Africa.
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This newsletter is distributed by the BUSA in-house PR and Communications desk. We always welcome feedback. Contact – Ms Masego Lehihi at masego.lehihi@busa.org.za To read more on these and other media statements disseminated to media by BUSA, kindly visit our website www.busa.org.za - click under Press Releases. First Floor 3 Gwen Lane, Sandton 2196P.O.Box 652807, Benmore, 2010 Tel: 011 011 784-8000
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