Leadership An Undeterred Vision for Transformation

When Jerry Vilakazi took over as the CEO of Business Unity South Africa (BUSA) in early 2006, he had a clear vision. To champion transformation. Transformation that would in turn bring about social equality as well as implement broad-based Black Economic Empowerment (BEE). This determined man who has two Masters Degrees from Thames Valley University and the University of London respectively also holds another Masters degree in Business Administration (MBA) from California Coast University. And this comes as no surprise.

Prior to the BUSA appointment, he was the managing director of the Black Management Forum, a membership organisation representing black managers in South Africa, a responsibility that he was very passionate about, and one that no doubt gave him the grounding for his current role. While the motifs of both organizations are rather opposed - the BMF aims to represent the interests of black managers while BUSA – aims to unify the entire business community by removing any racial divides – it is clear that both roles call for representation of interests.

The mandate of BUSA, a confederation of employer and business organizations active in macroeconomic, social policy and the formulation of business positions, was also very clear. To unite the business community in South Africa.

But equally so, to act as the principal representative of business in South Africa in its not only national, but also continental and international spheres of activity so as to ensure a unified voice with consistent representation of the views of the South African business community.

Further, BUSA aims to ensure that organised business plays a constructive role, within the context of the country’s economic growth and development goals, in achieving an environment in which businesses of all sizes can thrive, expand and be competitive both nationally and internationally. As a confederation of chambers of commerce and industry, professional associations, corporate associations and unisectoral employer’s organisations, BUSA represents over 80% of business in South Africa and their mission is to one day represent all 100% of it.

“Our mandate is to lobby government on behalf of the South African business community to ensure that the regulatory environment makes it easy to do business. For example we represent businesses’ interests in the National Economic Development and Labour Council (NEDLAC) where all the social partners meet to negotiate on policies,” adds Vilakazi.

On an international level, BUSA is also a member of the International Organisation of Employers (IOE), the Pan-African Employers’ Confederation (PEC), and the Southern African Development Community (SADC) Employer’s Group. BUSA is also the official representative of business at the International Labour Organisation (ILO).

“We also promote South Africa as the investment destination of choice and at the same time search for opportunities and new markets for South African products and services outside the country,” says Vilakazi.

Post 1994, business in South Africa still reflected the racial division of the past, with whites owning and controlling most businesses. Organized business was also divided between white – representing established business and black business which mostly represented emerging black entrepreneurs and small businesses that used to operate in the black townships. In a democratic SA this dual representation posed a challenge for most businesses as far as credibility was concerned. The birth of BUSA took place in the search for a unified and credible voice of SA business.

“Because business in South Africa has been racially divided, part of the deracialisation mandate has required that the business community look to organs that represent business and especially focus on unity while transforming, and hence the relevance of an organization such as BUSA,” he says.

According to Vilakazi, the coming together of black and white business was not the climax of BUSA’s job rather a means to an end. The post apartheid economy and organized business had to mirror the South African society in order to respond to the social challenges that were facing the country - high rates of unemployment, poverty, the big gap between the rich and the poor, etc. SA needed a transforming business community that is is responsive to the social challenges created by many years of social and economic exclusion of the majority whose plight today is characterized by high levels of poverty and unemployment.

Vilakazi points out that Africa as a continent has very weak private sector institutions, so it is imperative that Africa puts emphasis on building them because they are key to promoting business interests and advancing understanding with governments. A strong private sector is also necessary for the creation of free market economies as well as strengthening capacity to lobby for legislation which is conducive to attracting foreign direct investment.

“Where there is a strong private sector group able to engage and lobby with government, you will find a strong presence of investors. This also culminates into forging of trusts in the business arena,” adds Vilakazi.

One of the leadership challenges that Africa as a continent continues to face is social and economic inequality. And while the continent continues to experience high levels of economic growth, there are still many challenges of social inequality that need to be addressed in order to see the full realization of the economic potential of the continent. Business leaders have also got to find ways of responding to this challenge and not leave it to governments only.

Hence the significance of continental business forums which bring together key players from the business and political arenas in Africa. One of these is the African Business Leaders Forum (ABLF), which this year will be held in Accra, Ghana from October 17th to 19th.

“I am very optimistic about the ABLF as it brings together the top leaders from the business community and give them a chance to discuss challenges that confront our continent and raise innovative solutions through sharing of experiences,” affirms Vilakazi.

The ABLF forum is targeted at chief executives, managing directors, chairmen, director generals, government advisors, legislators, political and civil society leaders, entrepreneurs, legal advisors, senior and middle-level decision-makers in public/private organizations in Africa. The purpose of the ABLF is to concentrate minds on finding solutions to challenging issues of leadership at various levels in Africa.

This forum provides an interface for stakeholders in the public and private sectors to make viable contributions to addressing these challenges. More than 500 participants from 25 African countries attended the African Business Leaders Forum 2006 held in Johannesburg gathering high-level decision-makers from both public and private sectors. And the publicity and attention the event garnered was phenomenal with four live TV broadcast debates taking place during the forum, covering issues of service delivery and infrastructure development, skills development and mentorship, women empowerment, economic growth and sustainability, good governance and poverty alleviation.

“The ABLF is in my view one of the most significant business platforms in the continent, able to bring together people who are actually at the realm of decision making in both government as well as the private sector,” he adds.

Vilakazi in his capacity as one of the 36 world renowned speakers will be discussing how the business community should respond to the challenges of social inequality while identifying the key issues that drive this vice in economies.

Because business cannot sufficiently respond to the problems of Africa on its own and neither can government, the ABLF platform allows for a much needed interaction between business and government leaders in finding a solution to the problems that the continent is faced with in growing and developing its economy.

Granted, Africa has resources that should allow it to stand tall among many other countries in the world. A forum like the ABLF is very critical as it brings together all social partners who are integral partners in the journey towards the destination of this magnificent continent.

“It is very important not to forget that civilization started in this continent and therefore ultimately nothing should stop us from leading the continent back to its former statue and glory,” points out Vilakazi.

“Political leadership is also very significant to the growth of business. We need policies that are conducive to doing business. The suspicion and mistrust that often exist between government and business must come to an end. We should work together especially in addressing issues of trade barriers which hinder the effectiveness of doing business in Africa,” he adds.

And this then begs the question. Why is it that countries in Africa find themselves doing more business with countries outside of the continent than with those within?

Jerry quickly notes that it is imperative that governments deal with legislation issues as far as doing business within the continent is concerned. “Why don’t we make it attractive to do business within and amongst ourselves, within our continent?” he asks.

You find a country X that neighbours country Y in Africa. Country X has a resource or product that Country Y needs but Country Y finds it much easier to import the resource from outside the continent as opposed to buying from their immediate neighbour. Had the process been easier and the transaction happened between X and Y, so much time, money and energy would have been saved and put into another endeavour. It is simply ludicrous.

“There are a number of infrastructural challenges in Africa, that limit doing business in Africa as well. This is why we have welcomed the Pan African Infrastructure Development Fund Facilitation initiative (PAIDF) – by Africans and for Africans - which urges countries to respond to the infrastructural challenges in their own countries,” he adds.

The establishment of PAIDF is an initiative by the New Partnership for Africa (NEPAD) and is supported by the South African government and the Public Investment Corporation (PIC), South Africa´s largest investor of pension funds. PAIDF´s purpose is to create an investment platform for much needed basic infrastructure in Africa, to accelerate growth for sustainable development in Africa. The responsibility of infrastructure in each country is the problem of the country itself, but the NEPAD initiative should also identify the key problems that should be addressed. This is definitely an initiative that requires support from both the private sector and the government.

“I must stress the issue of regional development which in turn grows and links into the continent as a whole. The continent needs to address its challenges regionally (region by region) in order to eventually address the whole of it successfully. For example, one of the prime challenges that faces Africa in the future is energy security. This challenge can be dealt with by looking for solutions regionally. Take the DRC for example that houses the Congo River, whose capacity to generate electricity is not only enough to cater for East and central Africa but possibly the continent as a whole,” explains Vilakazi.

The same example can be applied to various other sectors including the telecommunications sector as well as the countries that are landlocked or do not have ports. The solution is to find regional solutions that also work for the good of the continent as a whole.

“It is also essential that we encourage and enable cross-border communication through efficient infrastructure,” he says. Proper communication lines, proper infrastructure allows for efficient business practice which translates into profitable returns. There generally also needs to be a change in thinking throughout the continent - in recognizing the worth of Africa’s resources as well as her potential.

Regarding the recent reports in the media that indicated that BUSA was concerned about the implementation of broad-based black economic empowerment (BEE) by private companies in South Africa, Vilakazi is not looking to appease the situation.

“It is important to note that if democratic SA does not translate into economic opportunities for all citizens, they will one day stand up and demand why. When the citizens of this country went to vote, they did so for a better life and new opportunities,” notes Vilakazi.

In his opinion, deracialization of society is key in creating an equitable society. Blacks, women, people with disabilities were previously excluded both in terms of positions in companies as well as ownership. Therefore transformation of the economy in South Africa is not to boost the ego of BUSA. It is a democratic and constitutional requirement. A failure to implement transformation is inexcusable.

“While there are some businesses that have done well, the majority of them are dragging their feet. Into the 2nd decade of democracy – we have, along with other partners negotiated to implement transformation,” explains Vilakazi.

Vilakazi notes that the recent employment equity commission report, painted a bad picture as far as implementation of the BEE legislation was concerned. “We have sent out a message to the ‘bad apples’ to conform to transformation. Some companies however, understand the principles of good corporate citizenship which is encouraging,” added Vilakazi.

“Black professionals also feel that they are being neglected as far as transformation is concerned. Moreover, we are listening to the anger that is coming through from a number of communities in the townships where people have been marching in the streets against poor service delivery and economic opportunities. We have been saying to our constituencies that this anger may not only be directed at government – the people are saying:

Thirteen years down the line of democratic SA, where is the economic change that they voted for?” he says

According to Vilakazi the private sector has a huge responsibility to create opportunities for the formally excluded groups of society and BEE seeks to enable this process. Persons with disabilities were previously sentenced to the welfare system. “When we enable these people, we make them positive contributors to the economy and take them off government’s grants,” he says. That is a win-win situation. It is also important to focus on women development by creating opportunities for women because in many parts of rural SA, many women still face utmost poverty.

Political change and transformation is undoubtedly not simple. Many lives were sacrificed to get to the point where South Africans could sit around a table to find a political settlement.

“We need to ask ourselves how we managed to get to this point successfully,” notes Vilakazi. There must have been a willingness and a commitment from all the leaders representing all our people including the government of the day. The miracle was simply a commitment and a willingness to agree, for the betterment of the lives of every citizen.

“We are now faced with the challenge of economic transformation and we need to deal with it. Legislations (like BEE) can help us to address this because it creates a framework but we need willingness and commitment of business leaders to change,” he explains.

Now and then the issue of a timeline for affirmative action has been raised, causing a lot of whispered discussions among people. But Vilakazi has no concern for it.

“The issue of a timeline on BEE is totally unreasonable at this point as progress to implement it in any case has been very slow. The key issue rather is how to increase the pace of transformation,” says Vilakazi.

“What we need to do is galvanise awareness for the implementation at this stage. Only once we feel that the economy mirrors the South African society can we begin to remotely consider it,” adds Vilakazi.

South Africa has definitely come a long way to get to its current position in many different perspectives. The policies that the South African Government implements as far as business is concerned are huge and other African economies can take a leaf from it.

The government has focused on creating macro-economic environment which could make the country an attractive investor destination. This directly builds confidence in the private sector to invest in the country.

“You need the private sector to invest when faced with the challenge of poverty. Government can only distribute wealth not create it and the government was aware of this. So the private sector creates wealth, followed by jobs and more jobs, better and more collection of tax enabling the government to address the social inequalities,” says Vilakazi.

The answer may lie in creating a free market economy with limited state interference. It is when business confidence is at its highest and there is economic policy certainty that the private sector invests more because without this the governments cannot provide better healthcare, education or infrastructural development. Also without taxes the government will be forced to borrow money from offshore funds. The SA government had also decided against borrowing funds and instead implemented very tight fiscal discipline and focused on improving the macro economic policy environment to attract more private sector investment. Hopefully, this will encourage the continent.

“It is scary to imagine that less than five countries contribute to 50% of the GDP of Africa. This says that we need to encourage economic growth in the rest of the continent. BUSA will continue to encourage South African companies to invest and do more business within the continent,” says Vilakazi.

BUSA’s role is also to ensure that SA companies doing business in the continent are also sensitive and responsive to the social problems and that when they go to other African countries they must include a meaningful participation of the locals in those countries as well.

“We want to make sure that the companies play a meaningful role to those societies and economies. We as South African business must however be cautious in the way that we deal with the rest of the continent. It would be unfortunate if the private sector in Africa, felt that South Africa was taking on a big brother role. And it will be a sad day the day that South Africa actually feels like that,” he notes.

“Rather, see it as a partnership and not shy off from leading - by offering the continent whatever they can in order to assist in developing their economies so as to maximize the capacity that we have as a continent,” he concludes.

It is apparent that Jerry Vilakazi is more an action man than he is a talking man and one can only expect the most out of any thing that he takes on.

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