No trust between state and business, says Remgro CEO

by | Mar 28, 2023 | General | 0 comments

23 March 2023 – 18:33 Kabelo Khumalo

The government doesn’t always trust the intentions of the private sector, said Remgro’s Jannie Durand on Thursday, calling for greater urgency in implementing reforms that would build private sector confidence.

The CEO of Remgro, the investment behemoth controlled by billionaire Johann Rupert, said while there was progress in implementing some structural reforms, a trust deficit between the government and private sector continues to exist.

He said the company was encouraged by the infrastructure spending of more than R900bn over the medium term allocated in the budget and bringing in the private sector to alleviate the embattled Transnet.

However, Durand said the government has not gone further in making it attractive for investors to plough money into Transnet.

“Infrastructure-led growth is critical. We can see some green shoots coming through like the privatisation of the ports. There is privatisation also of the rail corridor between Gauteng and Durban. Unfortunately some of the conditions that the government put on these things are quite restrictive and do not make it attractive to private investors,” Durand told investors in a conference call after the release of the group’s interim results.

“Government wants to keep control on some of these operations. There are things that will also prohibit efficient and effective deployment of capital and adequate returns for private investors. But we are steaming ahead and trying to make these things work and we are engaging with the government and hopefully we can get some positive feedback.”

Durand said it was important for the government and business to close the trust deficit between them.

“We need to breach the trust deficit with the government. They deal with us sometimes with scepticism and do not always trust our intentions and we probably have the same view. We as a business are committed to doing that.”

President Cyril Ramaphosa in the 2022 state of the nation address said his administration and its social partners had 100 days to conclude a comprehensive social compact to address issues of economic growth and unemployment.

However, more than a year later, there is still no agreement between the state, business and labour on how to tackle key socioeconomic issues.

Former president Thabo Mbeki has criticised Ramaphosa for failing to come to an agreement with social partners.

Remgro, worth R69bn on the JSE, has interests in financial services, petroleum, personal care products, packaging, beverage, medical services, mining and food industries.

Durand said corporate SA was determined to assist the National Prosecuting Authority (NPA) with requisite skills to curb the scourge of corruption. He said one of the avenues they were looking at, apart from giving the prosecuting authority money, was for the training of prosecutors and investigators. 

“The holy grail is that the NPA must remain independent and not be seen to be beholden to business. There are also initiatives geared towards training and there are overseas models that are being looked at of how people are trained at universities to be able to prosecute certain crimes.”

Remgro also became the latest corporation to call out Pretoria’s diplomatic relations with Moscow, in light of the ongoing war in Ukraine that has drawn international condemnation.

Durand said SA’s close ties to Russia pose a risk to trade relations and export revenue.  “A concern for us as a company is SA’s close alignment with Russia … that might have an impact in terms of our trading partners if they look at us unfavourably [regarding diplomatic ties with Russia],” he said.

FirstRand CEO Alan Pullinger three weeks ago also slammed SA’s “foolhardy” support of Russia.

SA has a fine tightrope to walk when it comes to its relationship with Russia. The two countries are part of Brics, alongside China, India and Brazil.

The International Criminal Court issued an arrest warrant for Russian President Vladimir Putin earlier in March, accusing him of illegally  deporting children from Ukraine, a war crime.

Ramaphosa is chairing Brics this year when SA is set to host the bloc’s summit in August.

International relations minister Naledi Pandor confirmed on Thursday that Putin has been invited to attend the 15th Brics summit.

Speculation is rife that British oil and gas multinational BP decided to exit all its aviation activities in SA due to the country’s diplomatic ties with Russia.

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