Business leaders fear that South Africa risks becoming a failed state

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Large firms no longer feel insulated from South Africa’s problems. There are limits to what they can do to protect themselves

, the electricity utility, have surpassed those of 2022, hitherto the worst year on record . Businesses are planning for the total collapse of the grid. “If this crisis continues, we will not be able to guarantee stable supplies of food, medicines and other essential goods,” wrote retail bosses in a letter to the president in February.

Yet today’s crises cannot be solved with a quiet word. Bosses typically cite three issues: power, logistics and crime. Last year power cuts may have reducedby 7-8%; 2023 could be even darker. The blackouts caused South Africa to go from being the most reliable among’s 19 African networks at the start of 2022 to possibly the worst a year later. The largest supermarket chain says spending on diesel for generators cut profits by 7% in 2022.

Last year a new unit, sitting in the presidency, was set up to reform the electricity industry. In March Mr Ramaphosa said that the private sector would pay into the Resource Mobilisation Fund , a whip-round designed to hire outside consultants. Themay well pay for a private team to try to reform logistics, too. “The aim is to create a parallel system of institutions to make things work in the moment,” says Morris Mthombeni of Gordon Institute of Business Science, based in Johannesburg.

Mr de Ruyter argues that business is still too timid when it comes to calling out corruption. After he was poisoned he was “disappointed” by the reaction of other business leaders, many of whom sent private messages but stayed quiet in public. “But that’s the culture,” he sighs.is unfixable you can’t fix the country’s problems.” The ruling party, he explains, is “fundamentally statist”. The situation is so dire, he contends, that society could “explode at any minute”.

 

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