Business Leaders Offer Zuma Plan for Economy at Cape Town Meeting

CAPE TOWN – More business leaders than there was place for attended a meeting with President Jacob Zuma on Tuesday, in a show of wanting to help the country out of its financial crisis, and offered a plan that he might consider before his State of the Nation address on Thursday.

Most news reports called the meeting between Zuma, Finance Minister Pravin Gordhan and Trade and Industry’s Rob Davies with more than 100 CEOs and leaders of industry a success and a signal of a stronger bond between government and business.

“As business, you are the backbone of the economy,” Zuma told the meeting at the Cape Sun hotel. (See video below.)

Ironically, the CEOs were meeting with the very man whose leadership has created much of the financial chaos and mistakes they are now trying to undo – Zuma – through croneyism in government and his unexplained firing of the finance minister in late 2015 that sent the rand and markets crashing.

The strategising is not only to shore up the economy but also to ward off the possibility of international ratings agencies downgrading South Africa to junk status. The main question now, though, is which of the suggestions of business will be accepted and carried through.

According to news reports, “the plan (of business) includes an acceptance of tax increases in Finance Minister Pravin Gordhan’s 2016/17 budget, but a plea that they be broad-based — that is an increase in value-added tax or the fuel levy rather than those that harm economic growth and investment. An increase in the marginal tax rates for wealthy individuals is also accepted as part of the plan”.

The plan was drawn up by the country’s top CEOs under the leadership of Old Mutual CEO in charge of emerging markets Ralph Mupita and Nedbank Group CEO Mike Brown.

Their plan also includes “concrete measures such as uniting behind a cohesive narrative and plan; overdelivery on fiscal consolidation; more effective management of state-owned enterprises, by appointing, for example, professionals to their boards; accelerated public private-partnerships; a review of legislative implementation to ensure consistency and certainty; ensuring that labour legislation contributes to inclusive growth, especially of the youth; and the appointment of a standing anticorruption committee to combat graft in both the public and private sectors”.