Big reality check for South Africa from Discovery CEO Adrian Gore
Discovery CEO Adrian Gore warns that anything that destabilises local government and affects economic growth must be addressed, and Gauteng is at the top of this list.
Gore has expressed serious concerns over the destabilisation of Gauteng metros, warning that this could pose a significant threat to South Africa’s economic growth, reported the Sunday Times.
He emphasises that local government instability, particularly in economically critical regions like Gauteng, must be urgently addressed if the country is to achieve its growth targets.
Although the DA and ANC are in a national government of national unity, this has not translated to a provincial or municipal level.
A recent example of local instability is the DA’s Cilliers Brink’s ousting as Tshwane Mayor.
The ANC has also established a minority provincial government in Gauteng after talks with the DA fell through.
As CEO of Discovery, deputy president of Business Unity South Africa, and co-convener of the business-government partnership, Gore is at the forefront of efforts to foster cooperation between these sectors to drive economic development.
In his view, the situation in Gauteng demands immediate government intervention.
Gauteng, as the country’s economic hub, plays a crucial role in driving growth.
Gore points out that if the province’s local governments continue to face instability, it could derail South Africa’s broader economic goals.
This is particularly important as the country targets a 3% economic growth rate, a benchmark that he believes could be jeopardised by the issues plaguing the province.
He underlines that the decline in service delivery and infrastructure in the region is unacceptable and should not be met with soft responses.
Instead, the government must take more decisive actions to mitigate further damage.
During the launch of Phase 2 of the Government Business Partnership at the Industrial Development Corporation on October 1st, Gore highlighted the ambitious goals set for the country.
The partnership aims to facilitate reforms and improve operational efficiency in key state-owned enterprises like Transnet and Eskom while also encouraging private-sector investment.
These efforts, if successfully executed, could see South Africa’s GDP growth reach 3.3% by 2025, creating millions of jobs by 2029.
According to Gore, although these goals are ambitious, they are achievable if the country stays focused on delivering the necessary reforms.
While the partnership’s primary focus is on addressing issues such as energy, logistics, crime and corruption, Gore has suggested that the scope should potentially expand to include local government concerns.
Gauteng’s unstable local governments, particularly in Johannesburg, threaten to undercut broader economic initiatives, making it a matter that warrants attention.
Johannesburg, the province’s economic engine, is grappling with significant infrastructure challenges.
Electricity supply in the city has become emblematic of the broader issues facing the region.
City Power, the municipal electricity provider, has struggled to offer reliable service, largely due to a severe maintenance backlog.
Much of the city’s budget has been redirected toward emergency repairs, further limiting the capacity for proactive infrastructure upgrades.
This instability in the electricity supply threatens to disrupt the economic activities that are vital to Johannesburg’s role as the economic heart of Gauteng.
Water infrastructure presents another critical challenge for the city. Johannesburg Water, the municipal water provider, has faced mounting difficulties in maintaining and upgrading its outdated systems.
Chronic water shortages, burst pipes, and water leaks have become common occurrences, affecting numerous suburbs in the city.
Reports indicate that nearly 40% of Johannesburg’s water is lost through leaks or illegal connections before it even reaches consumers.
Gore has noted that water could become an area of focus for the partnership, as sustainable water supply is essential for any long-term economic growth.
The broader financial crisis facing the Gauteng province further exacerbates these local challenges.
Lebogang Maile, the MEC for Finance and Economic Development, has warned that the province is facing a R15 billion budget cut, a financial blow that could severely impact its ability to provide essential services.
Maile has even suggested that Gauteng could face bankruptcy by mid-2025 if immediate actions are not taken to curb spending.
This precarious financial position is particularly concerning given Gauteng’s significant contribution to South Africa’s GDP.
Gauteng is the country’s economic powerhouse, but its financial instability and infrastructure failures pose a substantial risk to South Africa’s broader growth objectives.
The province’s ability to deliver essential services like electricity, water, and transportation is critical for sustaining economic activity.
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