BBF says delays in finalising GNU ‘poses a significant economic risk for black businesses’ and unnerves investors
BBF says delays in finalising GNU ‘poses a significant economic risk for black businesses’ and unnerves investors
It’s been a month since millions of South Africans took to the polling stations and voted in the National and Provincial elections yet no Cabinet is in place.
Politicians are still locked-up in talks after the ANC proposed a Government of National Unity (GNU) because no political party received 50 plus 1.
The Black Business Federation (BBF) said the delay in finalising the GNU poses a significant economic risk for black businesses in the country.
BBF, a professional organisation that intends to bridge the gap between the big corporates and emerging black businesses, said the back and forth or leaked letters between the ANC and DA is further adding to investor uncertainty and making the markets nervous.
BBF President Malusi Zondi said despite the democratic dispensation of the past 30 years, black businesses are far from reaching the level of growth and prosperity that should have been achieved by now.
Zondi said the uncertainty caused by the delay in forming a unity government may deter foreign direct investment, further hindering the growth and development of black businesses.
“As the nation awaits the announcement of the seventh administration executive, the Black Business Federation is appealing to President Cyril Ramaphosa to appoint to the Ministries of Trade, Industries and Competition, and Small Business, visionaries who will move the country forward by creating inclusive economies.
“Small businesses are the backbone of thriving economies, therefore the minister responsible for small businesses should create and sustain policies that attract foreign direct investment and develop programmes that support black businesses in gaining market shares that are in line with the transformation agenda for the South African economy,” Zondi said.
He said as the BBF, they are aware that the burden of job creation should not rest with government but they should create the conducive environment required for small- and medium-sized enterprises (SMMEs) to grow, leading to a reduction in unemployment.
Zondi said at the moment, political instability is increasing the risk of unemployment, particularly among black South Africans who rely heavily on SMMEs for employment opportunities.
He said on June 25, the ANC spokesperson, Mahlengi Bhengu-Motsiri, said a Cabinet announcement should be expected within 48 hours, however, the time has long passed and instead the ANC and the DA keep having public spats about their negotiations through the media.
Zondi said this had led to the volatility of the rand as the delays in the agreement continue.
He said a weaker rand for black-owned SMMEs translated into investor hesitation, potential withdrawal of investments and reduced access to funding for black-owned businesses as investors and lenders became more risk averse.
This could limit the SMMEs ability to grow and expand; a possible increase in inflation which reduces the purchasing power of businesses using the currency to trade internationally. This increased operation costs for businesses, making it harder to operate.
“The delays signal a lack of effective leadership thus deterring investors and negatively impacting business confidence. It is, therefore imperative for the government to expedite the conclusion of the Government of National Unity to mitigate these economic challenges and create a conducive environment for the sustainable growth of black businesses and SMMEs in South Africa,” Zondi said.
The Star