Govt unable to fix South Africa's problems

Govt unable to fix South Africa's problems

Discouraging investment

There are unprecedented levels of corruption which the management of Eskom is trying to sort out but there are too many vested interests.

We are not getting new factories coming, no big stuff has come to SA for five to 10 years because of this corruption and this load shedding and all these issues. Ackermans

Nick Wilson



South African retailers have questioned why government has still not been able to deal with major problems affecting the country, especially load shedding, which is severely inhibiting growth and discouraging investment.

Speaking at the annual summit of the Consumer Goods Council of South Africa (CGCSA) in Johannesburg on Wednesday, both Gareth Ackerman, CGCSA co-chairperson and Pick n Pay chair, and Clicks CEO Bertina Engelbrecht highlighted the significant impact it was having on the country’s economy, both on consumers, companies and potential investment.

Ackerman and Engelbrecht were among some of the keynote speakers at the summit, which was the first one to be held in person in two years.

Ackerman said the country had experienced over 2 000 hours of load shedding this year and needed to "ask ourselves, what is going on?"

"Why is Eskom paying for good coal, and people are stealing it and delivering rubbish and stones into the power stations which are then causing sabotage and causing us all to have load shedding? And people are doing it for greed. There are unprecedented levels of corruption which the management of Eskom is trying to sort out but there are too many vested interests. One has to ask the question why can’t government stop it despite what has been going on?"

Ackerman said the government seemed to be unable to fix these problems, along with other issues facing the country, and that time and again business had to step in and find solutions.

Investment

Ackerman said as a result of all these problems, investment was not coming into SA.

"We are not getting new factories coming, no big stuff has come to SA for five to 10 years because of this corruption and this load shedding and all these issues.

"We have to fix it and business has to go do it themselves, as I say it again, because government is unable to do so."

Clicks warned that load shedding, especially beyond Stage 2, was one of the biggest challenges facing retailers and that every effort had to be pursued in stabilising the country’s energy supply.

Engelbrecht said this was "one thing that we have to absolutely get right in this country in order for economic activity to be restored".



"In the pharmacy space as an example, because you have to dial up centrally to get the script for any patient, it means that you are not able to fulfil the script. It means you have to ask the customer to return."

Consumers and company executives alike had to plan their days around load shedding schedules.

"The largest incidence of shopping activity is between 16:00 and 18:00. If any person is facing load shedding, their primary objective is to get home and to ensure their family has food. Their primary objective is to make sure they are secure."

Supply

She said stabilising the country’s energy supply involved companies and individuals also looking at "our own energy utilisation".

But Engelbrecht also highlighted the great costs companies had to incur in order to keep trading when the lights go out.

She said Clicks had spent R90 million on back-up batteries, adding that no profit can be made from that investment.

"So when you are thinking of a company like ourselves where the institutional shareholders are your and my pension fund, the pension fund of your mother, you father, your sister and your brother, what is important is that we don’t waste money which would otherwise be invested in the growth of organisations."

Meanwhile CGCSA CEO Zinhle Tyikwe also called for collaboration between the government, organised business and other stakeholders to address SA’s economic challenges.

She said low economic growth in SA had been worsened by load shedding at a time when the country was beginning to recover from the Covid-19 pandemic.

Tyikwe said she was hopeful challenges could be resolved but said a lot of work had to be done, particularly from both a regulatory and policy perspective.