Government models 3.5% growth by 2029 as it launches 30 key reforms — here they are

If there’s one programme that works well in government, it’s Operation Vulindlela (OV), the presidential reform programme run by excellent technocrats and led by Rudi Dicks.

The parties in the Government of National Unity argue about most things, but agree that OV is the mechanism to get SA to grow, and grow in a way that ensures employment.

In its first phase, the programme unlocked R500-billion in the economy, mainly in energy, after the Cabinet lifted the cap on independent energy production. It has also seen a 51% reduction in data costs as the government finally achieved the spectrum auction. OV helps government departments and the three spheres of the state work together on often simple reforms.

The OV value has been independently verified. These energy reforms have generated 22,500MW of independent power (mostly renewable) to lift the pall of 12 years of load shedding, which has burdened South Africa. President Cyril Ramaphosa said the Northern Cape had seen billions of rands pour in for wind and solar plants.

“Electricity being delivered properly has had an impact on our people. The green shoots of reform are sprouting,” said Ramaphosa as he launched the second phase of OV on Wednesday.

“When I got off a boat in Cape Town, a young boy of about seven said, ‘Can I talk to you?’”

Ramaphosa agreed.

“He told me, ‘Please bring electricity back. I want to watch my TV shows.’”

Attendees at the launch of Phase 2 of Operation Vulindlela. (Photo: Elmond Jiyane/ GCIS)

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A turbocharge

The second phase of the OV started on Wednesday, 7 May, and it has set 30 key reforms to work on, notably in the digital economy and local government (see below).

The Bureau for Economic Research has modelled the reforms and found that, if implemented, SA could target 3.5% growth by 2029. The National Treasury forecasts SA to grow at 1.9%, but on Tuesday, Moody’s Ratings agency dropped its forecast growth for SA in 2025 to 1.5%.

“In the reform scenario, real GDP is R399.6bn (+7.7%) higher than in the baseline by 2029, and investment is R196.7bn (+22.3%) higher,” the OV Phase 2 finds.

OV is already working in eThekwini and Johannesburg.

The team will apply the lessons it learns in the six other metros before fanning out to the entire broken third sphere of the state.

Local government breakdowns harm the economy and are a rising concern for businesses, specifically for energy and water security. Saul Musker, the president’s director of strategy, says the 30 reforms are meant to “turbocharge” the economy.

Read more: After the Bell: Next phase of SA’s reform agenda should target meaningful job creation

Budget 3.0: An infrastructure Budget

The National Treasury is running this phase with OV, which can be read as a blueprint for the third 2025 Budget, which Finance Minister Enoch Godongwana will present later in May. The Treasury will increase conditional grants to the metros as announced in the Budget Review, but only on strict conditions of financial rectitude and with a commitment to reform.

Competition may be introduced to entities that provide water and electricity, with a key principle to ringfence revenues to ensure reinvestment through maintenance and new infrastructure investment.

Musker said the second phase of OV had a five-year horizon and would work in seven focus areas. Ramaphosa said SA would spend up to R1-trillion on infrastructure over the medium term and characterised Budget 3.0 as an infrastructure Budget.

“We need bold, far-reaching reform initiatives to revitalise our economy,” he said.

Both OV Phase 1 and Phase 2 depend on partnerships with businesses, which have invested human and financial resources in the reforms. In turn, the government is much more pragmatic in energy and logistics, where the private sector is encouraged to invest in generating electricity and, soon, running parts of the rail network.

THE 30 REFORMS

Energy Reform

1. Complete the restructuring of Eskom and establish an independent transmission system operator.


2. Establish a competitive wholesale market for electricity generation.


3. Streamline the regulatory framework for energy projects through the Energy Security Bill.


4. Reform the electricity distribution industry to establish financially and operationally sustainable distribution companies.


5. Strengthen and expand the national transmission network.

Logistics Reform

6. Complete the restructuring of Transnet and establish an independent National Ports Authority and rail infrastructure manager.


7. Enable open access to the freight rail network.


8. Introduce private sector participation (PSP) in ports and rail through a dedicated PSP Unit.


9. Establish the Transport Economic Regulator.


10. Finalise the National Rail Bill to establish a legal framework for a competitive rail sector.

Water Sector Reform

11. Implement institutional reforms to improve the management of water resources.


12. Strengthen the regulation and oversight of water service provision.


13. Support the introduction of private sector partnerships in the water sector.


14. Develop a National Water Action Plan.


15. Establish a coordination structure to ensure water security.

Visa System Reform

16. Implement the points-based system for Critical Skills visas and General Work visas.


17. Implement the Remote Work Visa.


18. Expand the Trusted Employer Scheme.


19. Implement an Electronic Travel Authorisation for tourist visas.

Local Government Reform

20. Shift to a utility model for water and electricity services to ensure financial and operational sustainability.


21. Review the institutional structure of the local government system through an updated white paper on local government.


22. Review the funding model and functions assigned to local government, including the use of conditional grants.


23. Standardise and professionalise the appointment of senior officials in local government.


24. Require all metros to establish or appoint ringfenced, professionally managed and independently licensed utilities within two years.

Spatial Inequality Reform

25. Revitalise and restore passenger rail services.


26. Strengthen demand-side housing policy to support densification.


27. Release public land and buildings for affordable housing and other development.


28. Clear the backlog of title deeds and make the titling system more accessible and affordable.


29. Review land use, building and other regulations to enable low-cost property developments.

Digital Transformation

30. Develop and implement a digital transformation roadmap for South Africa, including:

• Digital identity;


• Data exchange;


• Digital payments; and


• Digital service delivery platforms (eg, relaunch of Gov.za). DM