The efforts of business and government to work alongside each other are starting to pay off, the BLSA says.
South Africa has reason to cheer at the end of 204 after the country was free of load shedding for almost three quarters of the year, while work is also starting to pay off where logistics is concerned.
Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), points out in her weekly newsletter that there has been no load shedding for most of the year, while waiting times at our ports were reduced since the worst of the crisis and there were also improvements in the flow of goods on rail.
The National Prosecuting Authority (NPA) continues to regain its capacity and the trickle of successful commercial prosecutions growing into a stream.
“These are great achievements for Eskom, Transnet and the NPA. In each case, BLSA and other business organisations focused financial resources and expertise on supporting those organisations to deliver. Their success should be seen as a positive return on investment for business.
“While there have been times in the past that we felt sceptical about whether the demands on our resources are worthy of support, I think the last year shows that when we are able to partner fully with government and get into solution mode, we can successfully deliver an improved business environment.”
She says the formation of B4SA in particular has become a key forum for government and business to engage in solving our challenges and this year showed it can work.
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Reason for cheer ahead of festive season
“As we go into the festive season, we have reason for cheer. Business confidence is showing signs of improving thanks to these changes. We had three successive quarters of improvement, with the third quarter reading at the highest level we have seen in over two years.
“The fourth quarter has also had some positive indicators, including the improvement in the number of national and provincial government departments receiving clean audits from 93 to 142 in five years.
“We also saw credit rating agency S&P Global revise its outlook on South Africa to positive from stable, the first positive move on South Africa since Covid struck.”
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But much more to do for BLSA and government
However, she says there is so much more to do. “The disappointing third quarter gross domestic product (GDP) growth figures revealed that parts of the economy are still struggling, particularly agriculture. The work we do through the National Logistics Crisis Committee (NLCC) will help, but climate and weather must also play their part.”
Mavuso points out that the progress so far focuses on three of the country’s network industries, energy, transport and water, with the most significant gains coming from the energy sector. “That was the result of years of hard work, including bringing in a range of stakeholders through the National Energy Crisis Committee (Necom), to which BLSA committed significant resources to enable the Energy Action Plan, with the Presidency’s Operation Vulindlela (OV) to drive the reforms forward.
“One important but oft-overlooked element contributing to the improved energy outlook has been the Resource Mobilisation fund set up by B4SA, with contributions from the private sector. This proved to be particularly useful in terms of contributing expertise and resources when required.”
She says that is an example of how direct assistance from organised business plays a key role in maintaining the momentum of reform processes. “But every “victory” in the energy sector seems to unravel a new set of problems.
“The important Electricity Regulation Amendment Act was passed, enabling a raft of policies flowing from Necom and the Energy Action Plan to be implemented, but it hit legal troubles with municipalities concerned that they may lose the revenue from electricity sales.”
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Seeing fruits of energy sector reforms
However, Mavuso points out while we are starting to see the fruits of energy sector reforms, the path of fixing the water and transport/logistics sectors still has a way to go, despite recent progress.
“Through its support for the NLCC, BLSA added impetus to efforts to develop the Freight Logistics Roadmap. It already achieved an important success with the establishment of the Transnet Rail Infrastructure Management company, with its own management and reporting structure, separating it from Transnet Freight Rail to oversee the initial process of ensuring that the rail network is opened to private train operating companies.”
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She says water reform also made solid progress this year with OV playing a critical role in getting the new National Water Resources Infrastructure Agency established to ensure dams and connecting infrastructure are appropriately developed.
Water and municipalities next major crisis area
“As with energy, many water-related problems must be addressed by municipalities and that is the next major crisis area. During OV’s second phase, the focus will turn to tackling local government service delivery issues, such as water shedding and inadequate services that hurt businesses. This is critical work if we want to sustainably boost the country’s economy.
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“Turning around the many dysfunctional municipalities is possibly the most difficult goal facing OV. Most municipalities are run by political appointees and there are major skills gaps. BLSA already contributed to partly closing these gaps through its contributions to the Technical Assistance, Mentorship and Development (Tamdev) project of the National Business Initiative that seconds experienced people out of retirement to mentor and develop local government employees.”
She says that the BLSA will continue its support for the National Prosecuting Authority through the MoU that enables it to bring in private sector expertise for investigations. “This is critical to enabling the country to escape the FATF grey list by successfully prosecuting corruption.”
2025 will see G20 hosted in South Africa
2025 will also see the G20 hosted in South Africa. Mavuso says business will play an important role in supporting the event. “The B20 will operate alongside it and BLSA, as co-chair, will be actively working with the leadership team to ensure its success.
“Our focus at the B20 will be to ensure that issues important to business in South Africa and other emerging economies are conveyed through to the G20.
“We will also highlight the progress we made in our reform programme, emphasising how effective partnerships between government and business can be when working towards goals that are in the national interest. It will be an opportunity to tell the world that South Africa is back and open for business.”
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