Businesses drive economic growth through investment, innovation, and knowledge transfer. In South Africa’s case, the private sector employs approximately three-quarters of workers and accounts for more than two thirds of investment and research and development expenditure. This makes the private sector the key partner in ensuring that the Nation Development Plan (NDP) becomes a reality.

Addressing Old Mutual Board Dinner, Minister of Finance Nhlanhla Nene explained that the private sector cannot achieve the goals of the NDP alone. There needs to be a strong public sector that creates an enabling environment.

“One of the most-used words in the 400-odd pages of the NDP document is partnership. This reflects the fact that it is only through effective partnerships across society that we can achieve a virtuous cycle of rising confidence, rising levels of investment, higher employment, rising productivity and growing incomes,” said Nene. “The NDP provides a strong platform for such collaboration and the transition to a faster-growing and more inclusive economy.”

 

Building infrastructure

According to Nene, government has been engaging the private sector on its potential participation in the financing of infrastructure.

The Task Team on Private Sector Financing of Infrastructure has been focusing on identifying blockages to the private sector financing of infrastructure and making recommendation on to remove these blockages.

Among the blockages are those of a regulatory nature, such as those relating to the impact of Basel III requirements on the appetite of banks for infrastructure financing.

Nene said that there is significant appetite among private sector for financing infrastructure and that as long as the public sector offers appropriately packaged infrastructure projects, the private sector will invest.

 

Cutting red tape

A second role assigned to the private sector by the NDP relates to partnership with government. In return for the treatment of the private sector as a partner in policy design and implementation, the private sector must respond to and facilitate the realisation of national objectives.

Nene pointed out that government and business are already working together to address legislative and policy bottlenecks. This work is being led by the Presidency. One such collaboration relates to the cutting of cut red tape.