Dear Fellow South Africans: A letter from Cyril Ramaphosa on Monday 25 July

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Dear Fellow South Africans,

Since the advent of democracy, our people and indeed social partners have on many occasions been able to unite around common programmes to address the challenges facing our society.

As South Africans we united around our very first social compact together when we, after broad consultation, crafted our world-renowned Constitution that brought the end to the reviled and oppressive system of apartheid.

Over time, social partners have been able to reach important social compacts around job creation, economic growth, Eskom’s restructuring and the global financial crisis, among others. More recently social partners contributed to developing the Economic Reconstruction and Recovery Plan as a response to the effects of Covid-19.

The impact of these pacts has been varied but largely effective.

We have been facing high levels of joblessness, growing inequality and high levels of poverty over the past two decades. Our economy has not been growing at the pace that could enable us to make a meaningful dent in unemployment, poverty and inequality. To reduce the impact of these triple challenges we need a number of impactful interventions including to attract much more investment and enhance the capability of the state.

To turn our economy around and create the millions of jobs needed is something that cannot be achieved by the government alone. A comprehensive programme will require the mobilisation of all social actors. 

With this in mind, I said in this year’s State of the Nation address (Sona) that we would work with our social partners to finalise a comprehensive social compact to grow the economy, create jobs and combat hunger.

Over the last few months, a team led by the ministers of employment and labour, trade, industry and competition, and finance have been meeting social partners to map out the priorities that must be reflected in the new social compact. As part of this work the team has had ongoing meetings with social partners.

 A framework for a social compact has been developed. It identifies priority actions to achieve higher levels of investment and growth, increase employment, unleash the dynamism of the private sector, protect the rights of workers, expand support for the unemployed and tackle extreme poverty.

As the name implies, a new consensus can only be successfully implemented if there is full agreement on a common objective, the plan to achieve it, and a commitment by all partners to the plan’s implementation.

We have seen what happens when such accords are concluded to much fanfare, only to fall short on implementation.

To ensure better outcomes and impact, for implementation to be effective, this time we have to do better. Even if this means delaying the finalisation of the new comprehensive social compact until all social partners agree on the contribution they will make towards the betterment of society.

The proposed compact builds on many of the key tenets of the Economic Reconstruction and Recovery Plan, such as job creation, accelerating structural reform and growth enhancing measures, the expansion of mass public employment and social protection, and driving economic inclusion through greater entrepreneurial activity.

What is required most of all on the social compact is a clear set of interventions with a credible plan for their implementation.

While the state has a responsibility to improve the climate for the private sector to invest, implement social support measures to protect society’s most vulnerable, and spearhead poverty eradication programmes, there must be complementary actions by business.

There must be a willingness from both organised business and labour to discuss the trade-offs needed to implement growth-enhancing measures in such a constrained economic environment. There needs to be greater alignment between government and civil society organisations in our communities on poverty alleviation programmes.

South Africa does not need yet another plan to overcome the challenges of poverty, unemployment, and inequality. That is why the focus of ongoing discussions is on a set of catalytic interventions for maximum impact.

We all want to see a consensus finalised, but given the complexity of the issues, and so that we don’t set ourselves up for failure, it is absolutely critical that genuine consensus is achieved among all social partners.

Let us be clear, the implementation of the Economic Reconstruction and Recovery Plan continues. The work to grow the economy and create jobs is going ahead with the support of all economic stakeholders. There has been significant progress since Sona in implementing economic reforms, expanding public and social employment programmes in an unprecedented manner, working to bring new electricity generation capacity online and mobilising new investment.

There is agreement among social partners that the social compact cannot be a vague set of commitments, but a clear pathway to achieve higher levels of equality, jobs and common prosperity. What we now need is to work together with greater urgency and purpose, to complete that work, rather than to point fingers at one another.

Cyril Ramaphosa.