12 Dec Interview with Martin Kingston, CEO of B4SA, South Africa
What is B4SA (Business for South Africa)’s vision for South Africa’s economy and how are you working with the presidency and cabinet to achieve it?
B4SA was established in early 2020 as a unified business response to the pandemic. Part of the inspiration for its establishment was addressing the economic impact, including lockdown strategies and crafting a post-pandemic recovery plan at the president’s request. This recovery strategy outlined essential actions to drive economic recovery for a country already in recession and downgraded to junk status before COVID. In the second year, we shifted to spearheading the vaccination rollout, collaborating with the government on its design and execution. The private sector administered about 40% of the vaccines, playing a crucial role in the program’s success. When we emerged from the pandemic, South Africa’s economic position had worsened. Businesses recognized the need to partner with the government to tackle fundamental challenges, focusing on energy, transport and logistics and crime and corruption. Load shedding, a dysfunctional rail and port system and rising crime and maladministration were stifling economic growth and confidence. Building on the collaborative success during COVID, we saw an opportunity to bring business expertise to support government leadership. A fourth focus area—youth unemployment—was added due to the alarming statistic: of the one million young people entering the job market annually, only 400,000 secure jobs.
To drive progress, we established regular meetings with the president and his cabinet to review efforts, address challenges and build on successes. This partnership remains key to addressing South Africa’s economic headwinds. We plan interventions for the next 12 months, identifying key government decisions and implementation steps while ensuring proper resourcing. Governance structures have been established, reporting to the president through the Joint Strategic Oversight Committee, chaired by Phindile Baleni, the Cabinet Secretary. I represent the business sector on this committee. To address crises, the government set up three specialized platforms in energy, logistics, crime and corruption. The National Energy Crisis Committee (NECOM) oversees the Energy Action Plan. The National Logistics Crisis Committee (NLCC) implements the freight logistics roadmap. In the case of crime and corruption, a joint initiative tackles these issues. These platforms ensure alignment within government while integrating business participation and expertise.
Our goal is to create a functioning, inclusive and growing economy. The private sector, as the largest contributor to growth through investment, taxes and employment, depends on a stable economic environment. Aligning with the government on visible and credible solutions has been key. Over the past year and a half, this partnership has gained momentum and will be central to discussions with the president and his Cabinet.
B4SA represents over 1.6 million South African workers across sectors like finance, FMCG and energy. What have been the key achievements of B4SA and the Resource Mobilization Fund since their inception?
The Resource Mobilization Fund (RMF), which I chair, was established at the government’s request to address a critical skills gap. While the government has staff, it often lacks individuals with the specialized expertise needed for key projects. The RMF operates by identifying specific skills requested by the presidency such as project management, legal or technical expertise and raising funds from the private sector and philanthropic organizations to procure these resources. These experts or institutions are then donated to the Presidency to enhance capacity. To date, the RMF has raised $5.6 million for energy work through NECOM and nearly $4 million rand for logistics initiatives via the NLCC. This model enables faster, more efficient mobilization of highly experienced professionals compared to government processes.
At B4SA, we demonstrate our commitment by leading by example. We encouraged CEOs and company leaders to sign a public pledge affirming the importance of a thriving, inclusive economy and committing to specific actions. Over 160 CEOs, representing businesses across South Africa’s economy — large and small, local and international — have signed the pledge. To drive this effort, CEOs and top executives managing major businesses oversee work in energy, logistics, crime and unemployment. These leaders dedicate significant time to guide initiatives and participate directly, including in meetings with the president. Their involvement signals the seriousness of this partnership. For example, Duncan Wanblad, CEO of Anglo American and Mary Vilakazi, CEO of FirstRand Group, will attend the upcoming meeting with the president. This commitment fosters a virtuous cycle, encouraging broader participation. Beyond the listed 160 companies, organizations like Business Unity South Africa represent entire sectors, including mining, banking and all South African savings institutions through the Association for Savings and Investment South Africa, amplifying the initiative’s reach.
The president has noted that B4SA’s collaboration during COVID was unparalleled. While South Africa has yet to achieve its full potential, this partnership exemplifies how collective action between business and government can address national challenges and unlock opportunities. The seventh administration and the Government of National Unity bring renewed optimism and commitment to advancing key structural reforms. These reforms aim to create a more efficient government and economy while fostering an environment that enables private sector investment and job creation.
For U.S. businesspeople and investors, which sectors and opportunities are most attractive for foreign direct investment?
South Africa excels in sectors like financial services, boasting a sophisticated banking, insurance and fund management system admired worldwide for its efficiency and integrity, often surpassing OECD countries. However, there is untapped potential in areas like tourism, a major foreign exchange earner and job creator. Despite vast opportunities, the sector struggles due to infrastructure issues, visa constraints and crime perception, which B4SA and the government are addressing.
Emerging industries like data processing and outsourcing, particularly call centers, show significant growth, with South Africa outpacing India due to its favorable time zone for European markets. Traditional sectors like mining also underperform due to structural challenges, but reforms could unlock substantial potential. In energy, there is a clear shift toward private sector involvement through independent power producers, especially after the removal of capacity caps, which spurred significant offshore-driven activity. A similar trend is expected in transport, logistics and infrastructure. While privatization isn’t widely embraced in South Africa, there is growing recognition of the private sector’s role in developing and operating infrastructure, including energy, transport, logistics and emerging areas like water management.
Foreign investors often follow the lead of local investors. Increased local investment, now evident in various sectors, encourages greater international commitment. South Africa has historically attracted significant foreign investment, with examples like PepsiCo’s $2 billion investment, Walmart’s acquisition of Massmart and major brewing sector investments. Despite challenges, opportunities remain strong, as seen in recent asset sales by Chevron and Petronas to international investors. These developments highlight the country’s potential for diverse and exciting opportunities.
Your members have taken the CEO pledge to address South Africa’s infrastructure, transport and energy challenges, including the $10 billion partnership for the green transformation. What is your outlook for green energy in the country?
South Africa is a significant polluter, with Eskom (the electricity utility) and Sasol (a coal-to-gas company) as the largest contributors. Sasol’s CEO, Simon Baloyi, actively supports the just energy transition within the energy stream. While there is strong support for renewable energy leveraging South Africa’s abundance of solar, wind and hydro resources, the transition must be managed responsibly. The shift to green energy is costly and requires substantial financial support, as highlighted in COP discussions.
South Africa’s carbon-based economy is heavily reliant on coal, with Eskom’s coal-powered stations and many jobs tied to the coal mining industry. Energy Minister Gwede Mantashe, a strong coal advocate who came from the National Union of Mineworkers, emphasizes preserving coal-related jobs. Balancing a just energy transition with economic and employment considerations remains a critical challenge.
As Chair of Rothschild, which has shaped South Africa’s economy since the 1880s, how do you see entities like yours, along with B4SA members, contributing to South Africa’s global investment reputation?
Rothschild advises governments, institutions and private companies on asset transactions, capital raising and restructuring. We have supported the government in restructuring Eskom and advising Transnet, as well as consulting the national treasury. Our experience in handling macroeconomic challenges globally is relevant to South Africa’s needs. We also guide companies entering or exiting South Africa, including Chevron, Engen (formerly Petronas) and Shell. For Anglo American, we have ensured their operations align with the country’s needs. A conducive environment is essential for businesses to thrive or else they may divest, creating a vicious cycle.
The commitment of 160 CEOs reflects the understanding that addressing the country’s challenges is vital for their survival. However, building trust with the government, business and society is difficult, requiring credible progress, transparency and accountability. Given South Africa’s high unemployment rate, especially among youth, real economic activity and skill development are essential. The private sector acknowledges that waiting for others to solve these issues won’t work and they must be part of the solution.
After 30 years, we have made significant progress in some areas, but fallen short in others. The state capture period under Jacob Zuma was unfortunate and even after Cyril Ramaphosa became president, progress has been slow. People are understandably impatient, but reorganizing the country’s functioning and ensuring accountability takes time. We must manage expectations and work on improving efficiency and performance across both the public and private sectors.
What is your final message to USA Today readers considering South Africa for business and investment?
No country should rest on its past successes, such as a strong U.S.-South Africa trade relationship or large U.S. investments. We must not only maintain existing investments, but also build on them. The growing number of U.S. tourists and the export market are opportunities we must seize. We are also focused on ensuring the African Growth and Opportunity Act status remains strong and is improved. Major U.S. companies like Coca-Cola, Pepsi and Walmart highlight South Africa’s potential, but we can’t take that for granted. Hosting the G20 presents a major opportunity to showcase South Africa, especially its competitive advantages. While other African countries, like Kenya, are positioning themselves as gateways to Africa, South Africa remains well-positioned to exploit opportunities in Southern Africa. The US-South Africa private sector relationship has been strong and we must continue to build on it.