As the second wave of Covid-19 scours South Africa, it is more evident than ever that even the most astute financial modelling will not be able to predict the long-term economic and social effects of the pandemic. The pandemic and the extended lockdown have resulted in massive disruption with devasting numbers of small businesses shutting shop, pushing hundreds of thousands of workers into unemployment while millions more may be working, but for fewer hours and lower wages.
Rajan Naidoo, the Managing Director of EduPower Skills Academy says the economic outlook for South Africa has never been worse. “The pandemic has caused huge income loss for previously stable income earners. Without a doubt, the resultant poverty and misery will extend to the broader social context over coming months and if it continues unchecked, this could threaten our nation’s democratic and economic stability,” he cautions.
There is however a mechanism that can be used to quell this coming storm. Rajan says that alongside other enabling legislation, the B-BBEE Codes of Good Practice are a key mechanism that can and should be used to guide and co-ordinate South Africa’s economic recovery.
“B-BBEE has always been about empowerment and therefore hope. In the current economic environment though, it can be so much more,” Rajan explains. “It is a legislative mechanism for the expression of human solidarity that is not a hand-out or charity, but rather an act of broader self-preservation.”
Rajan is referring to the fact that B-BBEE is often a tick-box expense for large corporates that want to ensure their compliance in order to secure public contracts. He is however encouraging business to look beyond this and see B-BBEE is an enabler that is heavily focused on job creation through skills development, job opportunities and small business development and support. Rajan says, “These mechanisms were very important in a pre-Covid world but as the pandemic rages on and our unemployment rates reach critical levels, these B-BBEE drivers are now essential to our economic recovery.”
B-BBEE is intended to stimulate economic transformation and the process of participation of previously disadvantaged groups in the economy, creating value for companies whilst driving job creation. Of the five priority elements of the B-BBEE scorecard, skills development is one of the most important as it provides life-changing training for employed and unemployed individuals.
Rajan points out that the economy is dependent on the variety and type of skills that individuals can offer and skills development facilitates this. He believes that an investment in skills development is therefore not only an opportunity to improve business performance, it will develop the skills needed right now to stimulate economic recovery.
“If South Africa’s businesses invest in skills development as well as the other priority elements on the B-BBEE scorecard, we will see the establishment of more black-owned businesses and an increase in disability inclusion and overall employment. Yes, this is asking a lot in the current economic climate but by acting through human solidarity now, large corporates will be able to protect their long-term interest in a sustainable, stable democracy and economy,” Rajan explains.
This human solidarity is currently evident throughout the world and Rajan believes one of the best examples can be found in India: “Despite its own massive disease burden, India is willing to supply South Africa with vaccines. It’s this type of solidarity that is needed of all humanity, especially corporates from an economic perspective.”
Rajan concludes by saying that if Covid has taught us anything, it is that South Africa cannot afford to focus on narrow self-interest or isolate itself from the rest of the world; we cannot turn a blind eye to the misery being inflicted by the pandemic both here and on a global scale. Instead, the virus should be viewed as an opportunity to show our humanity and solidarity for the benefit of all.