Business throws its weight behind South Africa’s GNU reform agenda

Adrian Gore with President Cyril Ramaphosa at a meeting with members of the Cabinet, senior business leaders, and technical experts from government and business at the Union Buildings in Pretoria on 13 August 2024. (Photo: Jairus Mmutle/GCIS)

By Ray Mahlaka

14 Aug 2024

Business leaders are committing to continuing their work to permanently end Eskom blackouts and support reforms in Transnet’s flailing rail and port operations.

South Africa’s prominent business leaders have committed to supporting the Government of National Unity (GNU) by ramping up reform measures in three priority areas – electricity, logistics, and crime and corruption – to lift the country’s economic growth rate and improve the investment climate.

On Tuesday, the business leaders met with President Cyril Ramaphosa and his Cabinet members for the first time since the GNU was formed following the 29 May elections, in which the ANC lost the majority to govern.

In the three-hour meeting, business leaders — including Discovery boss Adrian Gore, Business Leadership SA CEO Busisiwe Mavuso, and Business for SA steering committee chairperson Martin Kingston — pledged to continue providing the government with skills and financial resources to address crises that are holding back the economy.

In the meeting on Tuesday, business leaders committed to continue their work to end Eskom blackouts permanently, support Transnet so that it could efficiently run its freight rail and port operations, and help South Africa’s law enforcement agencies make arrests and speed up the prosecution of complex crimes.

In a media briefing on Wednesday about the outcomes of the meeting with Ramaphosa, business leaders said ramping up reforms in the three priority areas would pave the way for organised business to continue investing in the economy, which would, in turn, grow the economy and create jobs.

Kingston described the meeting as “constructive”, adding that it was another opportunity for organised business to recommit to partnering with the government, providing it with expertise and financial resources.

Since the partnership started a year ago, more than 150 CEOs have helped the government and mobilised R180-million for it, with some of the funds being used to hire experts with forensic and financial skills to help the Hawks tackle complex crimes on “an arm’s length basis”.

The continuation of the partnership will probably allay concerns by some ANC officials, including David Makhura, who called on organised business to invest in the country to ensure political and economic stability, according to Business Day.

The business leaders reckon that if complex crimes are tackled and successfully prosecuted, and Eskom blackouts end permanently in 2024, South Africa’s economy has the potential to grow by at least 3% every year from 2030, from current growth levels of less than 1%. By 2030, the official unemployment rate would be reduced to 28% from 34%, the business leaders have also modelled.

Early wins in energy, logistics and crime

The partnership between business leaders and the government has clocked up a few wins.

At Eskom, there is a renewed focus on monitoring the performance of power stations, which has resulted in there being no blackouts for almost four months.

The Energy Council’s James Mackay, who is also part of the partnership initiative with the government, said the next phase of reforms would focus on measures to boost electricity generation and competition.

Areas of attention will include expanding and improving South Africa’s ageing electricity infrastructure to accommodate 22GW (22,000MW) of renewable energy from the private sector in the coming years, and reforming Eskom’s pricing architecture, which is archaic and results in the power utility implementing expensive tariff increases.

Read more: Eskom wants an increase in electricity tariffs of up to 44% next year

Read more: Presidency, big business double down on forecasted end to Eskom blackouts by 2025

“The private sector will continue to double down and mobilise capacity to support efforts in energy and bring innovative ideas to the table, which was encouraged by the president,” said Mackay at the press briefing.

Another priority would be the signing into law of the Electricity Regulation Amendment Bill, which has been hailed as groundbreaking for ending Eskom’s 100-year monopoly on electricity generation. The Bill paves the way for the direct purchase and transmission of electricity, not only from Eskom but also from private power producers, without going through cumbersome legal processes.

Read more: Future looks sunny for expanding renewable energy sector in SA

Trade, Industry and Competition Minister Parks Tau said the Bill was still being assessed by Ramaphosa, and that no timeframe was provided for its possible signing into law.

At Transnet, processes are underway to partner with the private sector to run trains and ports independently for a set period, while pouring in money to upgrade the flailing logistics infrastructure.

One of the processes includes the finalisation by the end of August or early September 2024 of a network statement, which details how Transnet plans to embrace the private sector as a partner for delivery in its rail network that spans 21,200km.

Read more: Transnet reveals details of plan to rope in private sector to fix its rail network

On crime and corruption, organised business will continue to support measures that help speed up the successful prosecution of State Capture cases and capacitate the National Prosecuting Authority with private sector skills. Doing so would also help South Africa to be removed from the Financial Action Task Force greylist, either by 2025 or 2026.

Read more: Treasury cautiously optimistic that SA will brave ‘tough challenge’ to get off FATF greylist

Business leaders and the government are exploring the possibility of the partnership expanding the three priority areas to include fixing the water crisis, the many dysfunctional municipalities, and improving basic education in the public sector.

Tau said there was no firm decision yet for the business partners to expand their priority areas. DM

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Early wins in energy, logistics and crime