When business becomes government’s crutch

In most countries, the notion of business being in any kind of “partnership” with the government would be viewed by the general public with suspicion, and rightly so. 

Think of the “tech titans” who attended the second inauguration of US President Donald Trump, including Meta CEO Mark Zuckerberg, former Amazon CEO Jeff Bezos, Alphabet CEO Sundar Pichai, Apple CEO Tim Cook, and many more.

The verdict of investors, I suspect, was forgiving; best not poke the bear, be friendly! But the verdict of the general public was that this sycophancy was craven, opportunistic and cynical. Some Trump supporters probably considered it a righteous endorsement but, generally, the public is suspicious of too much fawning and flattering because there is the danger it could quickly become self-serving. 

What a difference in South Africa. The involvement of Business for South Africa (B4SA) in helping to fix electricity provision, transport, crime and youth job creation is probably seen by ordinary South Africans as a massive relief, because by itself the government is clearly failing. Consequently, I suspect B4SA’s effort is regarded in general as enormously welcome and laudable. The organisation describes its own objective as being to “work alongside and in support of government to help accelerate economic growth and investment, create jobs, and build a more positive ‘SA Inc’ narrative”. 

And yet there is an uncomfortable irony to it all. In the US, investors and perhaps also a section of the public might give the companies involved something of a free pass on cosying up to the Trump administration, simply as a risk mitigator and an opportunity to avoid regulatory impediments on their businesses. That opportunity is plainly not available to local business because on the big policy questions, the ANC has made it clear it sees its primary function as deeply and fundamentally economically interventionist. 

The result is a rather odd situation in which business is deliberately and self-consciously bending over backwards to help the same government that is deliberately and self-consciously hurting business. Just to take one example in many, the recently passed National Health Insurance Act anticipates the end of private health care. So from the outside, it seems very odd that the CEO of South Africa’s biggest private health-care company, Discovery Health, should be helping to lead this effort. 

This irony has obviously not escaped the B4SA group, and Discovery CEO and lead convener of the B4SA group Adrian Gore meets this argument in various ways. At a report-back briefing last Thursday, Gore said the B4SA partnership is specifically about execution, not policy making, and that is part of the governance document that the organisation has agreed with the presidency.

The fact that B4SA is engaging with the government gives business credibility to stand up and be frank and firm about issues on which they don’t agree, Gore says. This argument has been raised and answered several times. With specific, targeted interventions in key areas of infrastructure, B4SA has now made some very big differences to South Africa’s economy, most notably, helping all but end the country’s load-shedding nightmare.

Propping up a failing administration

But now there is a twist. B4SA says it is considering making Joburg its fifth area of intervention. The situation in Joburg is “problematic”, Gore says, which is something of an understatement. There is already a lot of involvement by business in the city; there is lots of low-hanging fruit, so “why not try it”, he says. 

Well, in simplistic terms, the reason not to try it is that there is a difference between helping to keep the electricity on, which benefits all South Africans, and keeping a palpably badly run administration in office, which helps the governing political party. Of course, there are the residents of Joburg to think about, and the businesses that need the city services to stay afloat. But therein lies the whole dilemma. 

It’s presumably not an accident that the idea came up at a meeting last month between B4SA and the presidency. Reading between the lines, it’s pretty obvious that what happened here is that the presidency is worried about the ANC losing Joburg in the local government elections next year, and wants to draft what it considers to be “its” team of heavy hitters.

For its part, like its other interventions, B4SA has made it clear it intends to stay away from politics – but how do you do that if you plan to help a city government that is so obviously flailing? This is, after all, the city government which not long ago cut off the electricity and water to its own mayor’s office after the landlord the city itself appointed at huge cost failed to pay the utilities bill. And that is just one of its most recent egregious failings.

Sometimes you need to stop taking painkillers and just remove the tooth. 

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