BLSA CEO's weekly - 3 May

BLSA’s CEO’s Weekly – South Africans need a government that can commit itself to delivery

POSTED ON: June 9, 2024 IN by Admin
BLSA CEO's weekly - 3 May BLSA CEO's weekly - 3 May

By Busisiwe Mavuso

South Africans need a government that can commit itself to delivery and get straight to work.

We must consolidate a coalition government and get to work. It is urgent that the parties strike an agreement that South Africans can be confident will underpin an effective government. As BLSA noted last week, we welcome the call by the ANC to act in the interests of our country and safeguard our constitutional democracy. We trust that it will find those parties it can align with, and those parties show similar magnanimity in engaging. A great deal rests on an effective partnership and the world is watching.

We cannot waste time. To drive home the point, last week data showed the economy shrank in the first quarter of this year by 0.1%. The decline covered many parts of the economy including manufacturing, construction and mining. Investment was also sharply negative, with private investment at the lowest rate since 2016. This shows a clear lack of confidence in the outlook for the economy.

The coalition partners now have an opportunity to re-establish confidence. To do that they must move decisively to commit to structural reforms that are crucial to get the economy moving. In thinking about the first 100 days of the new administration, here are priorities that would get the country back on track:

First, to fix load shedding and reduce the cost of electricity, we must conclude vital reforms to the electricity sector, including the unbundling of an independent systems operator from Eskom and the establishment of an open market for electricity supply. The Electricity Regulation Act Amendment Bill was rushed through parliament before the election and is now on the president’s desk for signature. In the rush, some elements have found their way into the bill that are unhelpful, including discretion granted to the minister on certain matters. In the first 100 days these issues must be resolved, and the legislation signed. Significant progress must have been made in the unbundling of transmission from Eskom.

Second, to fix the crumbling logistics system, there must be material progress on the freight logistics roadmap that has been set out by the National Logistics Crisis Committee. This has already had some success in rapid interventions in key corridors through the collaboration between business and government. Deeper reforms must be accelerated, leading to the concessioning of ports and rail to enable the private sector to invest and operate these on a competitive basis. The road map sets out a tight set of timelines that government agencies must adhere to. In the first 100 days, there can be a recommitment to this timeline with government agencies aligned to deliver on it. In particular, concrete strides can be taken to enable Transnet to deliver on concessioning.

Third, we must progress efforts to fix the criminal justice system. There are many important reasons to get on top of crime and corruption, and shoring up business confidence is only one of them. Business critically depends on the rule of law, without which it cannot commit substantial investment. The lack of effective prosecution for corruption is one of the reasons South Africa is grey listed by the global Financial Action Task Force, which places a burden on all of us. Shortly before the election, legislation was passed to permanently establish an investigating unit in the National Prosecuting Authority, which was an important step forward. The new administration must commit to bolstering the rest of the system, particularly the police and its investigating and intelligence units.

On all three of these fronts, business has mobilised significant resources through Business for South Africa to support the government to deliver. We have drawn on the skills in the private sector to fill gaps in public resourcing to enable progress. A highly positive relationship has grown, demonstrated through successes such as the Electricity Action Plan that is now paying off through reduced load shedding with billions in private sector investment being put into generation. The new government should engage and reinforce this partnership which can enable rapid progress.

The reform successes of the recent past have had much to do with Operation Vulindlela, the delivery unit set up between National Treasury and the Presidency to focus on getting policy reforms implemented. The new administration should actively back OV, and I have been encouraged to see some political parties making it clear they will do this should they join a coalition.

The new administration could also make a highly positive impact by committing to economic policy formation, rationalising the confusing spread of responsibilities in the previous administration. For example, while much has been done to stimulate investment through partnerships between business and government, this has not translated into shovels in the ground. A consolidated planning function, ideally within or closely aligned to National Treasury, would help align policy and fiscal spending in a way that maximises its impact and crowds in the private sector.

As has been said many times, the interventions we need are well known. The challenge has always been delivery. While the last administration can count some successes on this front, the new administration could fundamentally depart from this legacy. South Africans need a government that can commit itself to delivery and get straight to work. I hope that is what we have, soon.


BLSA is a business organisation that believes in South Africa’s future and shares the values set out in the Constitution. BLSA is committed to playing its part in creating a South Africa of increasing prosperity for all by harnessing the resources and capabilities of business in partnership with government and civil society to deliver economic growth, transformation and inclusion.


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