We had a busy week last week as South Africa. On the one hand we put our best foot forward in both the B20 and G20 launches, and the City of Cape Town blessed us with good weather. On another hand we observed ongoing tensions in geopolitics. We launched the B20, a business effort that connects into the G20 later this year, to ensure that business leaders from around the world can develop and table policy proposals with an action-orientated mindset.
Business leaders from across corporate South Africa came out in numbers to support the launch of the B20 presidency, illustrating the importance of this historic presidency for our country, our continent and the globe.
The B20 is co-chaired by Business Unity South Africa and Business Leadership South Africa (BLSA), a partnership that underscores the collaborative spirit of the initiative. At the recent gala dinner, our chairman, Nonkululeko Nyembezi, delivered a keynote address that contextualised the significance of the B20 outcomes, highlighting their importance and relevance. Notably, B20 Sherpa Cas Coovadia emphasised that this marks the first time the B20 is being held in Africa, a milestone that underscores the continent’s growing influence in global economic affairs.
There was much acknowledgement of the tough environment in which this B20 is taking place and that some of the policy recommendations must now be developed in a dramatically different geopolitical context. The coherent Western alliance that is responsible for the long peace that has held since 1945 in global affairs is crumbling, creating a grave responsibility for us during our year of hosting the G20.
At the B20 launch, the CEO of the World Economic Forum, Børge Brende, noted that “South Africa has vast experience in handling conflict and competition, this is not an easy G20 with the geopolitical backdrop of what is happening – but you are well placed”. As much as we find ourselves in this difficult global context, business must continue. Multilateral trade is key to global economic growth with strong trends driven by services and digitisation over the medium term. We must find a way to ignore the noise and focus on issues around energy transition, climate change and new technologies like AI. He noted that the US will continue to play a significant role in the global economy, accounting for 30% of global trade and half of global military capability.
International Finance Corporation Vice President Susan Lund spoke of the important role Africa plays in the global economy Africa is growing and private investors are taking notice, with a significant rise in investment now in place for several years. South Africa and the continent have growing populations while key global economic nodes are shrinking. Africa has the workforce, markets, critical minerals and arable land, so must be central to a longer-term vision for the next phase of global growth. She also pointed to the role of credit rating agencies, whose methodologies and outcomes she says are biased and negative affecting emerging economies.
Apart from the US and China, the conversation was all about regions. That is important for how South Africa thinks of its future. We must be key in building the proposition of Africa as a regional bloc, which means embedding ourselves in the region. We need our logistics system to be capable of driving regional trade and we must focus on the African Continental Free Trade Agreement to make it happen.
On the G20 programme, last week also saw the finance summit taking place in Cape Town, bringing together finance ministers from member states. Global uncertainty and escalating tensions were also much discussed, with President Cyril Ramaphosa noting during a speech that “the erosion of multilateralism presents a threat to global growth and stability.”
The G20 finance ministers must tackle issues like financing climate change and debt sustainability in developing countries. However, the event could not find enough alignment to be able to issue a joint communique, another illustration of the fractious geopolitical environment.
I felt after the launch events last week that the B20 and G20 present South Africa with both an enormous opportunity and responsibility. Wider events mean that the G20, as a core institution of the multilateral system, has a critical role to play in setting a “new normal” for international relations and cooperation. The B20 will play a very important part in that process, identifying, developing and advocating for new ways of doing business and confronting our global challenges together. I felt very positive last week that South Africans will rise to the challenge and provide leadership to the world with our business community working prominently to support the effort.
Our domestic agenda, of course, remains critical in the process. BLSA was fortunate to host Parks Tau, minister of trade, industry and competition, to present to the BLSA Council his proposal for the transformation fund. The minister outlined the undoubted importance of the need for transformation and the progress we still need to make. The fund concept is an effort to bring a new instrument to the table, that the minister emphasised should be co-created with stakeholders including businesses.
The fund concept has the potential to help companies meet their BEE obligations. This fund could enable small and medium-sized companies who do not have the resources to build their own social and enterprise development programmes. The key question would be how that fund is well governed and deploys the resources where most beneficial and effective. I look forward to continuing to work with the minister to find answers that ensure the country makes progress on transformation while driving growth.
We face significant challenges both at home and abroad. While we see promising opportunities ahead, there’s considerable effort required to realise them. We continue to monitor our relationship between the United States and believe we can find resolutions with open lines of communication. I look forward to working with everyone involved as we work together to achieve the best possible outcomes.
Busiswe Mavuso is the CEO of Business Leadership South Africa.
BUSINESS REPORT