News

Poor service delivery ‘killing SA business’ - Business Day

25 January, 2012

On 23 January 2012 Business Day published an article highlighting the plight of a number of South African businesses in the face of poor service delivery from government. In many cases, the article says, private sector organisations are forced to carry out work that should be done by government, just to remain in business.

As a dedicated business insurer, Etana aims to stay in the know regarding factors affecting the business sector and to be prepared for any eventuality. In a recent scenario-planning exercise we identified a few possible global and local landscapes and started a number of “what-if” conversations around each scenario.

Etanan Gregory Scott, a key driver of our scenario planning process, points out that the environment outlined in the Business Day article is one of the scenarios put forward in the Etana exercise.

“One of the Etana scenarios, which are in the final stages of completion, forecasts an environment in which big business is required to carry out certain service delivery functions of the state,” he says. “This includes providing finance to fill in potholes on South Africa’s roads, sponsoring people to help direct traffic, and installing solar power for traffic lights.”

In this scenario, he says, corporates would also be called on to pick up the tab for skills development and education to maintain employee competency.

“Big business would need to extend its service delivery efforts beyond its own needs to assist the poor and to ensure the sustainability of the SME sector.”

Head of risk management at Etana, Marcel Wood, understands how businesses are affected when infrastructure is not properly maintained.

“Etana’s risk management services help our clients to stay afloat in the face of poor service delivery from municipalities,” he says.

“Electrical problems in the form of power outages, electrical surges and irregular power supply can cause enormous damage. Often these problems can be solved quite simply through the installation of standby generators, uninterruptible power supplies and surge protection devices.

“The original capital outlay is likely to be offset fairly quickly against the resultant mitigation of losses that would have been suffered otherwise.”

Inconsistent water supply can also lead to problems for businesses.

“Etana strongly recommends the installation of water tanks and pumps for companies where the supply of water is important in the execution of their services,” says Marcel.

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Download the full Business Day article here (PDF - 805kB)