The small and medium business champion, AHI, was deeply concerned by the irrational and reckless action by the President to recall his finance minister and replace his cabinet without consultation. Ongoing uncertainty had prompted AHI to call on the government to prioritise restoring stability to the country. AHI President Bernard Swanepoel said the country could ill afford the poorly timed events around the Minister of Finance and the Treasury, particularly, knocking the equity and bond markets, and the political strain they had caused.
“Small and medium enterprises are the main drivers of economic growth and job creation, but these SMEs are also the sector most vulnerable to political and economic turmoil,” said Swanepoel. “Any shock to the system which interrupts growth, innovation, procurement and an environment conducive to risk-taking, harms SMEs.”
The AHI wanted government to assure South Africans that its decision-making was not aimed at serving only narrow interests. “Government must urgently demonstrate its commitment to prudent management of the fiscus and adherence to the National Development Plan,” he said.
Historically, countries which had experienced a ratings downgrade took up to seven years and more to recover. Some never did, Swanepoel warned.
“Continuing the partnership between business and government achieved over the past 15 months, to stave off a lower sovereign rating, will require a redoubling of effort to steer the country back towards being an attractive investment destination,” he said.
Swanepoel said the country urgently needed openness, transparency and certainty. Certainty of policy direction. Certainty of accountability. Certainty that ethical government and the rule of law were inviolable. Certainty that government’s actions would support, not harm, business – large and small – in the shared quest for inclusive growth and jobs.”
That, he said, was the only way investors would return to South African markets, prevent a skills exit and unlock billions of rands of capital investment
Bernard Swanepoel is the President of AHI, the Big Voice for Small Business for over 75 years.