Alarm bells for one of South Africa’s largest employers

The consumer goods sector, one of the largest employers in South Africa, says the nation can not survive any more shocks from infrastructure bottlenecks, load shedding and poor municipal service delivery.

Speaking at the annual summit of the Consumer Goods Council of South Africa (CGCSA), co-chairs Pick n Pay’s Gareth Ackerman and Clover’s Johann Vorster said that the cost of doing business has skyrocketed amid the challenging economic environment.

This has limited the ability of companies to operate profitability, create value, and invest for growth and employment creation.

“The challenge is that the government is not doing its job properly, and we now have to help it in doing things for which we are paying tax for it to be done,” Ackerman said.

“We need to ensure water, electricity, potholes and sewerage are repaired and work. We have to deal with crime and poor service delivery. These are unbelievably depressing things, yet they are basics.”

He noted that the port and rail infrastructure is incredibly ineffective, forcing the consumer goods sector to use expensive road freight, damaging roads.

Business insurance has also increased nearly twofold following the 2021 riots, whilst salary and wage increases have not improved with the rising cost of living.

“It has become a lethal cocktail which needs to be adequately addressed by the government, working together with business to get things going on to grow the economy,” said Ackerman.

Vorster added that businesses should help their localities by cleaning the environment and partnering with municipalities to repair broken infrastructure. He noted that local authorities are willing to work with the private sector in areas where they need help.

“We need as businesses and every company to put its own pressure in its own community and municipality, and we can win as a nation. We need to realise that we need to take responsibility and accountability in business and government,” Vorster said.

“There is place for policy and government, and I think as businesses, we can also add something. To create jobs and get the economy moving, we need to work together.”

CGCSA CEO Zinhle Tyikwe noted that the consumer goods sector is one of the biggest sectors in the country, with more than 2.5 formal jobs.

It is also a serious contributor to GDP and plays a significant role in ensuring food security.

“We are therefore advocating for the government to improve economic conditions, attract investment and allow businesses to make profits, enabling them to reinvest and create employment. We need to work together to make the economy grow for the good of the country,” Tyikwe noted.

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