Good start tackling investor negativity, Mr President – but a key stakeholder was absent

An unemployed man begging for help. (Photo: iStock

An unemployed man begging for help. (Photo: iStock)

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Within a few months President Cyril
Ramaphosa has done his best to tackle investor negativity in South Africa.
However, creative ways to engage the unemployed must be developed.

The job summit and the investment summit
were a success. So was the excellent work done to produce the new Mining

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All these have demonstrated without doubt
the willingness of Ramaphosa’s administration to work with labour and investors
to unlock growth potential and create jobs. Negativity had become a currency.
So the confidence-building measures are commendable.


From employment creation perspective, the
practical results of the summits, Ramaphosa’s overall stimulus package and his
strategy to rebuild good governance are yet to be realised. The summits were
successful only as part of the first and significant steps we needed to take as
a country emerging from under water where we were drowning ourselves.

More still needs to be done for us to
enter into the much-needed sustainable growth phase. The phase must create jobs
at a fast pace, introduce new black economic empowerment deals that benefit new
players (not just the usual suspects), particularly black women, and broadly
uplift communities and workers.

READ: Ramaphosa:
Radical economic transformation must make all feel part of SA

Predictably, the two summits for jobs and
investment were dominated by labour, investors and government. Coming as we did
from a period where lack of trust between the three had begun to cause
destructive hostility instead of constructive engagement, it was indeed
necessary and understandable to start repairing trust.

The absent stakeholder so far has been
the unemployed. We should find meaningful ways to bring them into the centre of
the discussion as participants.

There must be ways to communicate with
the unemployed directly, hear their stories and, where feasible, work with them
to create employment potential.

If investment summits are held in Alexandra or
in rural areas, for example, investors would also realise the facts of
unemployment, poor infrastructure, unacceptable levels of housing, basic
sanitation and education. This could trigger government and business to come up
with joint solutions currently expected from government only.

Beyond populism

We must not leave the unemployed
exclusively in the hands of populists. In the end, it is us the entrepreneurs
who will provide jobs. While political mobilisation is important as an
essential part of our vibrant constitutional democratic system, we should find
additional ways to engage the unemployed in less emotional ways.

The consequences of sustained
unemployment are not only the usual social ills such as crime and drug abuse.
Unemployment could be a contributing factor to the lack of appreciation of community
infrastructure that is often vandalised.

READ: Impact
investing needs business schools to get on board

Not only should communities learn to
appreciate government investments in the form of public infrastructure such as
schools, clinics, bus stations and others. They also need to appreciate and even
invite private investments that have a potential to bring jobs.

But until the corporate sector develop
ways to involve the unemployed in our high-level summits and decision-making
structures, we will not manage the frustration. Nor would we be able to address
their needs as part of creating a conducive investment environment.

In the resources sector, we have a Mining
Charter that provides a framework for stability in relationship between
investors, workers, communities and the government. Now, the industry and the
Department of Mineral Resources have to work hard to ensure communities take
advantage of the new charter and to engage constructively with investors who
bring much-needed capital and create jobs.

During the colonial/apartheid era, many communities
where mining took place were left poor because there was no policy mechanism to
empower them. Now that the Mining Charter and other government regulations
provide for empowerment of communities, the challenges are ensuring awareness
and constructive implementation.

Xolobeni’s win against a mining company matters

The Grace
judgement, delivered unanimously by the Constitutional Court in October,
reinforced the need for adequate consultation with communities residing on
communal land. The Xolobeni judgement
of the High Court November went beyond the need for consultation and gave
communities the right to veto mining. The latter judgement seeks to usurp
government’s authority to grant or withdraw mining rights. It remains to be
seen how Mineral Resources Minister Gwede Mantashe will handle it to ensure regulatory

But broadly speaking, these judgements
pose a challenge to the mining sector to find new, better and respectful ways
to engage stakeholder. The starting point must be the new mining charter that
specifies a minimum five percent shares for communities and workers in new
mining ventures. The ultimate aim must be to undertake mining operations that
will benefit communities.

New ways of

Unfortunately, resentment to investments
due to our sad history of land dispossessions, old-style corporate top-down
engagement, divisions within communities and ideological lobbying by
anti-mining fundamentalists can combine to frustrate job creation and genuine community

The Department Mineral Resources must find
ways empower communities with information about the benefits of the new mining
charter. This will help communicate engage better with investors who must also
support the charter.

Responsible companies should find it
fulfilling, not a nuisance, to engage with communities who are prepared to use
the Mining Charter to benefit from wealth-sharing arrangements and job
opportunities. Despite the negativity that dogged the sector in the past, it
still has a huge potential.

It is unacceptable and scandalous that a
peaceful and democratic country that is a world leader in natural resource
endowment – worth $2.5trn according to research by Citigroup – is also among
world leaders on unemployment, at more than 27%.

Bayoglu is the managing
director of Canyon Coal. Views expressed are his own.

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