Business organisation Business Leadership South Africa’s Reform Tracker quarterly update, released last week, shows real progress in home affairs and public services; however, there are concerning reversals on electricity and logistics, the two reforms most critical to growth, CEO Busi Mavuso writes in her latest weekly newsletter.

“With loadshedding behind us and the ports performing better than at the height of the crisis, I fear we are falling into the trap of ‘good enough’. For a country with 32% unemployment, good enough is not good enough,” she cautions.   

The tracker credited the Department of Home Affairs for progress on electronic visas, streamlining access for tourists and boosting visitor numbers and the associated jobs.

Progress in public service reform was also noted, with Mavuso highlighting this as groundwork for improving the performance of local government and the civil service more broadly.

However, she referenced “concerning” reversals.

“On electricity, deadlines have again been missed. Wheeling protocols that would enable electricity generators to sell power over the grid to customers were due in April and have now been pushed to September.

“Finalising regulations for the South African wholesale electricity market, which would deliver the genuinely competitive electricity market our economy needs, is also facing delays,” Mavuso points out.  

She adds that independent power producers are having their production curtailed and State-owned utility Eskom now owes almost R2-billion for electricity not used.

“Most seriously, the unbundling of the independent system operator from Eskom has been delayed despite it being unambiguous government policy. This is no longer a matter for negotiation – it is a matter of implementing what has already been decided,” Mavuso asserts.

She stressed that improvements such as Eskom plant performance and extensive investment in new private sector generation must not lead to complacency and be allowed to translate into slowed implementation of remaining reforms.

Mavuso emphasises that energy is a critical growth enabler, with production capacity needing to be bolstered to engender economic growth.

She cautions that the logistics sector faces the same risks as energy. 

“Rail and ports are performing better than at the peak of the crisis and I want to acknowledge real progress. The publication of the draft Volume 4 of the Network Statement earlier this month, which sets out the terms on which private operators can access the rail network, is a significant step.

“Port concessioning is advancing: last week Cape Town’s container terminal joined Durban, Richards Bay, the Cape Town liquid-bulk terminal and Ngqura in the concessioning process, and Durban Gateway Terminal has reached financial close, opening the way to R11.1-billion in new investment. These are meaningful milestones,” she acclaims.

Mavuso warns against complacency here too, noting that the Transport Economic Regulator, responsible for overseeing a competitive rail market, is not yet operational.

She posits that the unbundling of the rail infrastructure manager from Transnet to create an independent and neutral provider of rail access to all operators is “going backwards”.

“Without both, the terms set out in the Network Statement cannot be enforced and the full benefit of private sector participation will not be realised. We need a step change in the performance of our logistics system. Not incremental improvement, but the kind of transformation that makes our ports rank among the world's best and ensures miners and manufacturers can move goods reliably and at competitive cost,” she stresses.

Mavuso perceives a pattern across both sectors, that of progress occurring where government drives it and holds firm, and stalling where State-owned entities resist and Ministers enable this.