Consumer Goods Council of South Africa Calls for Decisive Government Action to Grow the Economy

The Consumer Goods Council of South Africa (CGCSA) co-chair Gareth Ackerman says South Africa has reached a tipping point which now needs everyone to roll up their sleeves to work together to grow the country, its people and the economy.

In a statement at the annual CGCSA Summit in Johannesburg, Ackerman cited regulatory uncertainty, policy inconsistency and the poor performance of key state owned enterprises such as Eskom as some of the issues requirement urgent government intervention. Equally worrying is the poor performance of the economy which is hardly growing in the face of record unemployment.

“Last year when I spoke at the opening of the CGCSA Summit, I was cautiously optimistic about the future of our country, largely because of the initiatives led by President Ramaphosa to restore institutional integrity and governance across Government and State Owned Enterprises, and his clarion call for job creating investment.

“Business leaders reacted positively and have in various fora suggested practical solutions to move our country forward.  While I am an optimistic person – I have to admit, being a businessperson in South Africa – that I am equally concerned that it seems that for every one step forward, SA is still taking two steps backwards,” Ackerman says.

CGCSA, which represents the consumer goods sector – which is the largest employer and invests billions of Rands every year in South Africa – has and continues to reach out to and work with relevant Government Departments on policy changes and improvements to facilitate job creation and investment.

“We need to increase consultative discussions with Government which result in implementable actions, growth and job creation. Our industry already is the largest employer in SA with over two million employed,” Ackerman says.

Ackerman says he is worried economic growth remains stagnant and has been low over the past five years, if not longer.  “The state of the economy was starkly put into perspective when last week Finance Minister Tito Mboweni presented the Medium Term Budget Policy Statement.  Moody’s changed its outlook on South Africa from Stable to Negative. This is not good news. We can easily lose the remaining investment credit grade, which will be disastrous for our already weak economy.

Ackerman says the performance of State Owned Enterprises is worrying to say the least.  Eskom in particular is lurching from one crisis to the next.   “The spectre of load shedding looms large.  Businesses cannot operate – let alone plan for the future – in such an environment of unreliable and uncertain power supply. The economy cannot afford the Government bail outs of Eskom and other SOEs without affecting other key sectors of the economy, including basic social services,” he says.

Ackerman says regulatory uncertainty and overlap is still worrying the consumer goods sector. The large volume and frequency of new and revised policies results in considerable uncertainty among government officials in implementing policy and related regulations. Ackerman says regulations enabling policy are also often not fully understood or resourced by officials, nor by business and are frequently and substantially changed before being given full effect.

“There is also evidence of contradictory policy and regulatory level objectives across different government departments. This is creating a culture of distrust between government and the business sector in general, at a time when there should be national consensus on how to move the country forward,” he says.

Ackerman says business wants a government which not only listens to business, but also acts. “There is enormous goodwill from the private sector, including our members, who are committed to not only further investment but also partner with the Government to find solutions to our economic challenges. South Africa is not short of ideas neither of experts to help Government achieve national economic objectives.”

On industry matters, he says GCSA has met the Ministers of Agriculture, Land Reform and Rural Development; and Environmental Affairs to discuss, respectively, among other issues the call for a single foods control agency, taking lessons from the Listeria outbreak; the  need for clarity on tenure on communal rural land;  the need for the plastics levy to be used for the purpose it was introduced and paid for by the SA consumer and to support the Government’s Green Deeds Campaign, which CGCSA fully supports.

He says CGCSA is proposing a partnership with the Departments of Health and Trade & Industry to minimise food waste and feed the many people who go to bed hungry every day. About 1400 kCals are wasted per person per day in SA. In terms of national and global goals, this waste needs to be halved by 2030.

CGCSA wants to partner with the Government to provide the necessary legislative and enabling environment to assist companies achieve their objective of minimizing food waste.     Currently there is no guidance, legislative or otherwise, regarding the use of food that is safe for human consumption, but has passed its best before date/date of durability. “We need to relook at the regulations,” he says.

Ackerman says the DTI and Small Business Development Department, working with Proudly South Africa, should train and enable SMMEs to adopt and use GS1 Barcodes.  This has significant benefits for the SMMEs, among them identification & product classification.  Government can use product identification codes to recognise products/produce with a known inspection history, and will be able to remove non-compliant products out of the supply chain as GS1 System authenticates the owner through the licence.

Ackerman says he is pleased to note the call by the Minister of International relations Naledi Pandor at the United Nations General Assembly in September for the adoption of the Sustainable Development Goals in South Africa. We support the call and adoption of the SDGs as a tool to assist in the development of our people and our environment.

Ackerman also says CGCSA supports the national imperative of economic and social transformation. Its members have and continue to invest in supporting small and medium scale companies particularly in the FMCG and retail sectors, through job creation, training, supplier programmes and other initiatives. “We commend the work being done by our SETAs now that the confiscation threat by the government has abated.”

On the Competition Commission grocery inquiry, he says CGCSA supports the broader principle of levelling the playing ground for all participants in the grocery sector. “Our members however have divergent views on the findings of the report and suggested remedial action.  We hope the multi-year and multiple enquiries will soon be concluded. Our industry is totally competitive and the huge cost we have had to incur in attending to these enquiries could have brought down food prices to the consumer and assisted in the government creating further jobs and economic empowerment.”

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