Warning over delivery crisis in South Africa

South Africa’s government has always had the tools at its disposal to resolve its various issues—and it knows exactly what needs to be done. The real crisis it faces is one of delivery, says Business Leadership South Africa CEO, Busi Mavuso.

In her weekly letter, Mavuso warned that the new government that will be formed in the coming weeks needs to urgently place delivery at the forefront of its mandate, or risk the same stagnation and deterioration in areas like energy, logistics and combatting crime that has come to the fore in the last decade or more.

“A great deal rests on an effective partnership. We cannot waste time. 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,” she said.

Mavuso said that the first 100 days of the new administration should focus on rapid execution to get the country back on track, leaning into the plans and partnerships that are already in place.

First, to fix load shedding and reduce the cost of electricity, the country 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,” Mavuso said.

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.

“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 concessions,” she said.

Third, the country 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 new administration must commit to bolstering the rest of the system, particularly the police and its investigating and intelligence units.”

According to Mavuso, dealing with these three critical issues boils down to delivery.

“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,” she said.

The CEO said that 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 this process, she said.

Read: How much you need to earn to be in the richest 1% in South Africa