Q2 2020 - (released August 2020)
SA's quarterly Private Equity & Venture Capital magazine
by Michael Avery
As South Africa’s lockdown rumbles along into its fifth month (day 127 at the time of writing), economic surveys; high and low frequency data points; stories of businesses closing – some large, many small; and jobs and incomes lost into the millions (according to the NIDS CRAM study) blur into one frightening picture of an economy obliterated.
And while the COVID scourge provided the fear, it has been government’s handling of the lockdown regulations that have provided the loathing. From ignoring the experts’ advice on leaving schools open to allow parents to head back to work and the task of reopening the economy (and for students to continue receiving meals), to allowing taxis to carry on imperilling the lives of their passengers at 100% (and more) efficiency, and continuing bans on the sale of alcohol and tobacco on questionable science, the anger and breakdown of trust is palpable.
And it couldn’t have come at a worse time, apart from the obvious need to rebuild. Government has finally gazetted 50 infrastructure projects that have been through the new SIDS methodology to ensure delivery and execution on time, on budget, and without corruption.
Speaking to Dr Kgosientso Ramokgopa, head of the investment and infrastructure office in the Presidency, about what makes this time different to other failures to launch grand infrastructure-led recovery programmes, there is an honest admission that government has run out of capacity in key areas and funds. The private sector is the only answer. And the only way to build successful public-private partnerships is to build trust.
Any whiff of the sort of corruption that plagued the Zuma administration, and that which is on display relating to the procurement of personal protective equipment, will send private sector partners packing.
Ramokgopa says that, in effect, the process of gazetting these projects means that they will now be fast-tracked in terms of the Infrastructure Amendment Act and all regulatory approvals, be they water use licenses or EIAs, must be resolved within 57 days of being gazetted.
This is encouraging talk. But we’ve heard lots of talking up to now. Capital providers in the private equity sector and elsewhere will want to see demonstrable commitment to action now, and a swift and comprehensive response to the spate of corruption that has surfaced around government’s COVID relief response, to start repairing the broken bridge of trust.