Newsmaker Sacci’s Alan Mukoki on ‘flying blind’ as lawlessness rules
Sacci chief appeals for strong state response to rioting, looting
● Riots in Tshwane and Johannesburg have caused “chaos and shambles” for businesses and “sapped whatever little confidence was left from an investor point of view”, says Alan Mukoki, CEO of the South African Chamber of Commerce and Industry (Sacci).
He blames “a lawless environment in which people feel they can do what they like with impunity. The government needs to show that it is serious about law and order.”
He’s referring to the failure of police to arrest and prosecute those involved in the looting and destruction of businesses, he says, and also the failure of border officials to stop undocumented foreigners entering the country.
Immigration laws need to be enforced, he says.
“Government needs to understand and deal with what is happening at our border gates. Why is there corruption, why are we allowing people who are not properly documented to enter the country and create unnecessary risks?”
By failing to police the borders properly, the government has allowed a tinderbox situation to develop. And it has shown itself incapable of protecting businesses from the consequences, he says, starting with a dysfunctional intelligence system.
“The national intelligence system, whether part of the police or National Intelligence Agency, needs to work. It needs to provide proper intelligence and data so that we know where the hot spots are likely to be. That is why they are there. To ensure the safety of property and humans.”
They should be feeding this information to the Sacci so it can warn its members to take precautionary measures.
He says they have been receiving “absolutely no” intelligence, which has left them completely defenceless.
“We’re all flying blind. The only information we get is from the media, by which time it’s usually too late.”
The results have been devastating.
Many businesses are not insured against these kinds of risks.
“You read the fine print of your insurance agreements and find they exclude a lot of this type of public disorder and violence.
“So they’re carrying a whole lot of additional risks themselves. Because now they can’t trade. But their fixed costs remain the same. Rentals and salaries still have to get paid. You’re still expected to fulfil delivery commitments.”
This doesn’t only hurt them, he says. It will cost the fiscus millions.
“On the one hand, businesses will be going into liquidation. On the other, the state will not be receiving the taxes it would normally get from businesses that are trading.”
But the true cost of the disruptions in the country’s most important economic hubs is “much higher”, he says.
“You’re damaging investor confidence because people think there is a lack of governance in SA, that nobody is actually in control here.
“If you're sitting in Japan, South Korea, Taiwan, England, Spain or anywhere else where people are pitching an opportunity to open a manufacturing plant in SA, you start to wonder.
“Of all the other jurisdictions you can choose, why should you choose SA? What is it that the country is selling? We’re selling chaos and shambles.
“We’re showing ourselves up as an ungovernable country. Why would you put money in a place like this?”
The local business community is equally unlikely to invest in the present climate of lawlessness.
“If you want to open a plant, and you don’t know if your plant and equipment could go up in flames without the police doing anything about it, why are you going to do it? You won’t.”
Mukoki says the recently signed African Continental Free Trade Agreement (AfCFTA) will also be adversely affected by reinforced perceptions of xenophobia in SA.
“Everyone knows it is all about relationships. Long before you discuss the products or services you want to provide each other there has to be a relationship. Disruptions like this create a huge level of mistrust, of countries asking what’s wrong with SA, what are they doing to people from Africa?”
In the absence of government communicating exactly what is happening and what it is doing about it, social media spreads the message that hundreds of foreigners are being killed in SA.
“Even if it’s not true this is what people in Africa believe.”
To the extent that this creates fear, uncertainty and doubt, it will impact “very negatively” on the AfCFTA, he says.
“African governments are coming under a lot of pressure from their voters over whether they should be doing business with SA or not. The success of this thing is all about people-to-people contacts and relationships.
“If they think all we want to do is kill them and there’s no protection from law enforcement for life and property, then it’s a longterm problem.”
South African companies in Nigeria and Zambia have closed stores in response to retaliatory attacks by locals.
“We need to make sure our embassies in those jurisdictions are in front of the story, explaining exactly what is happening. That the vast majority of South Africans are not xenophobic. A few hundred people cannot be representing 60-million people.”
He believes it is misleading and dangerous to label the violent outbreaks as xenophobia. “We cannot afford to politicise crime, to say that when people are committing crime they’re being xenophobic. Deal with it as crime. When people steal goods and burn property it is crime. Xenophobia is used as a cover to commit crime.”
For trust and confidence in SA to be restored, the government needs to demonstrate that it has the capacity and will to take decisive action to contain violent outbreaks “before they get completely out of control”, he says.
“To have any hope of restoring the trust that is vital to investment, business people need a very clear plan from government about what it intends to do to deal with this issue in a way that is decisive.”
The best answer to so-called xenophobia, he says, is “the enforcement of existing laws, proper policies, proper leadership, proper values, proper service delivery”.
“This is what we as business have been pleading for.”
You’re damaging investor confidence because people think there is a lack of governance in SA Alan Mukoki
SA Chamber of Commerce and Industry CEO