Partnering with Government - The Social Compact

A Commitment to Move Forward

By Raine St.Claire

"We will continue to build an inclusive economy, focusing on the empowerment of black and women South Africans, advancing workers’ rights, intensifying land reform and pursuing a just energy transition that leaves no-one behind. In the past year, we have come together with social partners to end loadshedding, address the challenges in the logistics sector, tackle crime and corruption, and accelerate job creation.

This is the South African way of building a social compact working together on tangible issues, and it will be the key to building a new society in the years to come."-President Cyril Ramaphosa

In his State of the Nation Address (SONA) in February this year, President Cyril Ramaphosa reiterated his commitment to ongoing social compact initiatives. He pledged to persist in reducing unemployment and driving meaningful economic growth. During the address, he highlighted a year-long government effort dedicated to forging a comprehensive social compact. The aim is to unite all social partners in a collective programme focused on rebuilding the economy and facilitating higher economic growth.

His message was unequivocally positive, emphasising Government’s commitment to achieve growth targets.

“We will use our foreign policy to pursue our development goals. During our leadership of Brazil, Russia, India, China and South Africa (BRICS) last year, we witnessed a new chapter for the BRICS family of countries.

The expansion of the group from five to ten members presents opportunities for trade and a strengthening of political and diplomatic ties between countries in the global South. We will build on the progress we have made in establishing the African Continental Free Trade Area (AfCFTA), which will transform South Africa’s economy and that of the continent by creating new jobs and increasing economic participation.

And we will place Africa’s development at the top of the agenda when we host the G20 in 2025. The achievements over the last three decades are a testament to the power of collaboration and partnership to address our most pressing challenges.

Our country has a vibrant civil society, a powerful union movement and an engaged private sector. Over the last five years, we have worked with these social partners to address challenges such as to keep people safe and to distribute vaccines during the COVID-19 pandemic, and to mobilise a society-wide response to GBV.

In the past year, we have come together with social partners to end load-shedding, address the challenges in the logistics sector, tackle crime and corruption, and accelerate job creation. This is the South African way of building a social compact working together on tangible issues, and it will be the key to building a new society in the years to come.”

Government's Collaborative Efforts: Advancing Social Compact Development

Government has worked hard in the past year, collaborating with social partners to finalise a comprehensive social compact centred on economic growth, job creation, and hunger alleviation. The team, led by ministers, actively engaged with social partners to delineate priorities.

This proposed compact builds upon the Economic Reconstruction and Recovery Plan, emphasising job creation, structural reform, and economic inclusion through entrepreneurship.

Despite progress, ongoing efforts to conclude the compact persist, with a specific focus on key areas such as energy, transport, logistics, employment creation, skills development, investment, localisation, social protection, and the fight against crime and corruption.

President Ramaphosa highlighted successfully concluded compacts in the battle against COVID-19, vaccination programmes, and collaborative initiatives like the Solidarity Fund. Partnerships targeting gender-based violence and climate change have also yielded positive results.

Through this collaborative model, the government has effectively promoted investment and crafted master plans in various sectors, showcasing the advantages of this cooperative approach.

Navigating The Social Compact Standstill: Pushing Forward

Eighteen months after President Cyril Ramaphosa committed to establishing a “social compact” within 100 days to boost the economy and address widespread unemployment and various challenges, there remains a deadlock among government, business, and labour union leaders. Despite efforts at the National Economic Development and Labour Council (Nedlac), a forum dedicated to policy consensus, details of the compact are still a work-in-progress after 11 drafts.

Cas Coovadia, the business representative at Nedlac, acknowledges the forum’s “existential crisis,” attributing the impasse to the global geopolitical dynamics, including the Russia-Ukraine war, foreign policy positioning, and discussions around forming a ‘south’ bloc, all adversely affecting the country. “The most pressing challenge appears to be one about ideological positions among social partners in respect of the path to growth, which have not shifted despite the enormous crisis the country faces,”

Deputy President Paul Mashatile said, “We must summon enough bravery to discuss this matter openly in order to prevent the ticking time bomb of poverty, inequality and joblessness from going off.”