Straight talking Investec CEO Koseff’s plea that NDP parts don’t get dropped to appease Labour

Stephen Koseff: Investec's CEO hit the news after suggesting ANC Deputy President is "on the wrong bus" regarding the NDP
Stephen Koseff: Investec’s CEO hit the news after suggesting ANC Deputy President is “on the wrong bus” regarding the NDP

A black-eyed Stephen Koseff appeared on the front page of the Sunday Times Business Times this week together with ANC Deputy President Cyril Ramaphosa. Both were pictured wearing boxing gloves. We asked Koseff to come through to the CNBC Power Lunch studio to explain the context of his comment in the newspaper that Ramaphosa is “on the wrong bus” and his other statement that he is “terrified” at what the politician said in his speech to the Banking Summit. As even, forthright, honest and lacking the ability to pull punches, Koseff let rip. That a South African  business leader feels sufficiently comfortable to offer such strongly worded criticism is in itself progress. Not too long ago, such suggestions would have been met with a storm of outrage from the ruling political party. Now, apparently, it is being encouraged.  – AH   

To watch the video of my interview with Stephen Koseff on CNBC Africa’s Power Lunch click here.  

ALEC HOGG: Warren Buffet says never do anything that, if it appears on the front pages of the Sunday newspaper, might embarrass you. Well, I’m wondering if Stephen Koseff, Chief Executive of Investec, is feeling embarrassed about appearing on the front page of the Sunday Times yesterday.

STEPHEN KOSEFF: It did look like Cyril (Ramaphosa) was winning the boxing match.

ALEC HOGG: Did you have a black eye?

STEPHEN KOSEFF: No, not really.

ALEC HOGG: Was the photograph doctored?

STEPHEN KOSEFF: It was doctored, ja.

ALEC HOGG:  Give us the context. … It was made out to be a hostile situation.

STEPHEN KOSEFF: Cyril wasn’t even there. He had made a speech at the Banking Summit and in the Question and Answer session we were having a dialogue and I wasn’t happy about a part of his speech – two elements to the part of his speech. One was: small business should be the driver of growth. Well, if you don’t resolve the labour issue small business is not going to drive growth. And the second issue was the disagreement on the implementation of NDP – the stuff they’ll carry on dialoguing and its this stuff that’s holding the economy back.

ALEC HOGG: You weren’t too happy about it?


ALEC HOGG: Did you get support from the other people?

STEPHEN KOSEFF: Yes, sure. All the economists on the platform, but they’re just more diplomatic than I am. I say what I think and they will talk roundabout. No-one was happy about the fact that we’re not really adopting the NDP fully-fledged, that we’re adopting sections. Not where there’s a dispute with labour I think. Because Cyril did not really articulate it, that’s what we all assumed is going to carry on dialoguing.

ALEC HOGG: So you were surprised that Cyril Ramaphosa, who’s been painted by the business sector as the great hope for this country’s economy – because at last there’s someone in cabinet who really understands what’s going on in the economy – is deviating.

STEPHEN KOSEFF: No, I think they’ve obviously got policy issues and they have to get everyone in their lines on stream. But that in essence is what’s holding the economy back: it’s these strikes, this labour issue that we’ve had over the past year. The strikers think it just affects them. It affects the whole of South Africa. You go around the world and they talk very highly about Africa rising but South Africa going backwards. So it’s those sorts of issues that need to be addressed. It’s quite simple: We need an accord between business, labour and government. It’s there in the NDP. Why are we not concentrating on getting that accord?

ALEC HOGG: Did you actually say that Cyril’s on the wrong bus?


ALEC HOGG: What did you mean by that?

STEPHEN KOSEFF: The issue is labour relations. That’s where it starts. Let’s fix labour relations and if we then implement the NDP, which we should be implementing, then he’ll be on the right bus.

ALEC HOGG: But he’s on the wrong bus because labour relations has been taken off the table?

STEPHEN KOSEFF: That’s what we’re assuming. We don’t know. There’s a whole lot of areas that the labour part of the Tripartite Alliance is not happy about – and I’m not sure where the Communist Party stands. Those issues are the very same issues that are holding our economy back and we need to resolve that. Look at the strike on the weekend. Imagine what the impact is on a small business. When a restaurant that employs lots of people, when electricity is out because of sabotage. What’s that got to do with pay? A few months ago…I can’t remember how long ago…Kumba went on strike after each employee received R500 000 from the Empowerment Scheme. What has that got to do with reward? And they hijacked all the trucks. It was about 9/10 months ago – October last year.

ALEC HOGG: So what’s the solution?

STEPHEN KOSEFF:  The solution is that if you’re going to grow the economy then labour has to get together with business and with government – be partners in growth and development. If everyone is going down their own roads, we are not going anywhere. We are going to limp along at between 2% and 4% (GDP Growth) depending on what’s happening in the rest of the world. We need to go out at 5% and 6% and until we come to that understanding between the parties, as to ‘how are we going to have an accord’ where there’s no stoppages, where everyone knows what role they’ve got to play and everyone then concentrates on doing what’s right for the broader economy and for the country.

ALEC HOGG:  I’ve heard it said that the NDP is being dumbed down. It’s been simplified. The difficult parts are being taken out so that perhaps people who don’t absorb the complexities of this economy that’s got so many moving parts, can understand it and appreciate it. Is that accurate?

STEPHEN KOSEFF:  I don’t know. NDP is very detailed and clearly you’re not going to be able to implement the whole NDP in one go. But they’re talking about an NDP increasing employment from 13 million people to 24 million people by 2030. Now for that to happen you have to build infrastructure, which we’re on the path of doing. Hopefully, that will all start moving in the right direction. We’ve already seen all the green energy plants taking all the projects and getting finance. Now the developments will start taking place. You must have  labour and business and government working together, so there are all sorts of elements to the NDP. We have to improve our educational system. That’s going to probably take decades to get the proper impact. We have to absorb unskilled labour. Now how do you absorb unskilled labour if you’ve got no labour flexibility? They’re talking about the strikes today – the petrol station strikes and some say ‘well, you go to Europe or other parts of the world. They’re automated. Guys fill their own cars’. Then what happens to all those people (pump jockeys)? They’re out of jobs. Where are they going to find jobs?

ALEC HOGG:  It’s a complex system and there are many paradoxes in this but I want to know: did Cyril Ramaphosa pick up the phone to you after seeing the Sunday newspaper?

STEPHEN KOSEFF:  He didn’t see it. He was either overseas or somewhere else because I phoned him about it.

ALEC HOGG:  And what did he say?

STEPHEN KOSEFF:  He was laughing at the gloves.

ALEC HOGG:  Did he think it was a joke?

STEPHEN KOSEFF:  No, he thinks – obviously – things need to be said and he doesn’t have any objection to me saying it.

ALEC HOGG:  Which is different to perhaps in the past when you recall Tony Trahar (then Anglo American CEO) got slapped around quite badly by (President) Thabo Mbeki for making even less of a suggestion than the one that you’ve made.

STEPHEN KOSEFF:  I don’t remember what he said.

ALEC HOGG:  Well, he certainly got slapped around.

STEPHEN KOSEFF:  Ja. Cyril you can have a proper dialogue with.

ALEC HOGG:  Do you think we’re improving in that regard where you can come out publicly?

STEPHEN KOSEFF:  Ja, I think there is tolerance.

ALEC HOGG:  You’re not scared that Investec’s going to lose government business?


ALEC HOGG:  Have you got a lot of State business?

STEPHEN KOSEFF:  Maybe a bit, but not that much.

ALEC HOGG:  But that’s not the point.

STEPHEN KOSEFF:  No. The point is; you’ve got to say what needs to be said and business needs to say what needs to be said. Even members of government says business’ voice is very silent on all these issues, because of that very fear.

ALEC HOGG:  So apart from your conversation with Cyril, have you had any other feedback?

STEPHEN KOSEFF:  Nothing. Just you guys wanting me on the radio.

ALEC HOGG:  On the television.

STEPHEN KOSEFF:  On the television, ja.

ALEC HOGG:  But no other business people have been around to say ‘Mr Koseff, we support you’.

STEPHEN KOSEFF:  I’ve had quite a lot of that.

ALEC HOGG:  Where to then from here? If the business community has to rely on Stephen Koseff to actually say what he believes and as a consequence of that it’s such big news you get onto the front page of the Sunday newspaper with boxing gloves, why are we all so quiet?

STEPHEN KOSEFF:  I think we’re scared of what you spoke about earlier – probably as a community we have to maintain good relationships. I think there are various business leadership forums. There’s Business Leadership South Africa. There’s Business Unity South Africa. There’s the Black Management Forum. I think some of them are just more diplomatic than I am.

ALEC HOGG:  Stephen Koseff, good to have you in the studio.

STEPHEN KOSEFF:  Thank you, Alec.

ALEC HOGG:  Thank you for coming and telling us your perceptions and indeed, the fact that Cyril Ramaphosa’s totally on the wrong bus. You still think he is. Are you still terrified of what he said….You were quoted as saying you were terrified.

STEPHEN KOSEFF:  I’m worried about the lack of implementation. I think the NDP is a very good step in a very good direction for us as a society and if we achieve it, I think it takes South Africa forward many, many years. What Cyril did say was we’ve made a lot of progress, which I agree with. The country has made a lot of progress. We could have gone like Egypt and we haven’t, so we have to be very thankful for the path that Madiba took us down and that’s what Cyril was also saying in his talk. So I agree with a lot of what he said. It’s just that the NDP is very important for us to implement, and we shouldn’t waste any time. And that’s the frustration. If we’re going to carry on the talk shop then in 2/3 years’ time we’re still going to have gone nowhere, because there are these ideological differences. They have to put them aside if they want the economy to grow and they want the society to deal with poverty. You’re only going to uplift poverty from growth. It’s not going to go any other way.

ALEC HOGG:  Stephen Koseff, thank you: the Chief Executive of Investec.