03 Dec

Convention for the Economic Transformation of South Africa (COETSA)

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We had Codesa in 1992 which transformed the political landscape of our country and gave us independence of a suppressive government. Twenty years into our new democracy, the gap between the poor and the rich has widened. The reasons for this are various and it is not our intention to engage in a political debate as to the root cause of this continued disparity.


As colleagues that are involved in the SME space, we too believe that we need a Convention for the Economic Transformation of South Africa (COETSA).  The status quo cannot continue any longer. We will publish a series of blogs that make suggestions on how to address the worsening situation of our beloved country.  The purpose is to increase dialogue and hopefully make a difference. We fully support the work of organisations such as South African Small and Medium Enterprises Federation and Archbishop of Cape Town Thabo Makgoba. Through these blog posts we aim to draw more attention to the movement.




All role players that are active in the economy have to be included. Our suggestion is the following groupings:


  • Government;
  • Trade Unions;
  • Captains of Industry;
  • Entrepreneurs.


Each body would have one vote; therefore government won't be able to force any resolution. For resolutions to be carried it would require a 75% vote. An arbitration panel of judges could be used for impasses.


Issues that need to be addressed


We cannot have a society that is dependant of social grants. Over 13 million people depend on the state which is costing our country R120 billion a year. Our society is quickly loosing respect for itself and the ideology of entitlement is becoming entrenched. The money should be slowly be reallocated to SME development. It is a proven fact that through SME development a country can decrease unemployment and stimulate the economy.  


Now that there is a Ministry in place that specifically addresses this issue, they should be given a large budget to assist this area. The management of the funds should be given to role players that have an established track record in this area of expertise. 


Below are some of the issues that we feel needs discussion:


  • Private enterprise is key to the economic transformation of South Africa. Initiatives that tried to address this issue have failed therefore must be abolished. New ideas have to come out from COETSA. Initiatives such as BBBEE and Nedlac have to be changed to be more effective.
  • State Owned Enterprises must be run by business people and should be appointed through a subcommittee of COETSA. 
  • Unions cannot embark on wildcat strikes. Legislation should be put in place for minimum qualifications for trade union leaders. It is clear that the current leadership have no basic knowledge of economics as their actions have resulted in job losses and a decrease in our country's GDP. They should not have such power. 
  • Mines have to be more socially responsible. These injustices have to be addressed. In one of our previous blogs we came up with a solution of proper distribution and balance is this area.
  • A percentage of our GDP has to be directed to entrepreneurs. Again the mechanics of how this could work would be dealt with in COETSA.


There are obviously much more issues, but the resolution of the above will go a long way in solving most pressing issues.


Proposed Agenda for COETSA


The role players would have to agree on the point of reference. We believe the agenda below would be a good start:


  • Entrepreneurs need to be supported;
  • SOE to be addressed; 
  • Independent watchdog on corruption;
  • Firm legislation that government officials, their family and close friends cannot engage business with the state;
  • CIPC privatised. Making it easy to start a business;
  • Workers more inclusive (See our mining blog;)
  • Unions to engage positively, proper through realistic framework; and
  • BBBEE policy changed (As we will outline in our next blog)


Therefore COETSA will be forum where discussions revolve around how best to help entrepreneurs, empowering workers through creative structures and to make the workforce inclusive of the economic decision making. Furthermore it should develop structures to eliminate corruption.




Agreements reached through COETSA must be embodied in the constitution. It must be constitutionally binding on all participants. These can be implemented through statuary formed regulatory bodies that would be representative of the role players. These bodies could be:


  • The Cabinet;
  • Umbrella Trade Union bodies;
  • A South African Chamber of Commerce;
  • A South African Chamber of Entrepreneurs


Next Step


We need all the role players to agree in principle to the idea and start formulating the framework of Coetsa. Maybe private enterprise must initiate the process?


We will be bringing a series of blogs during December that address some of the key issues dealt in broad terms in our introductory blog.


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