Structural reforms in energy, telecommunications, water supply, transport and the visa regime that attracts investment, skills and tourism are expected to raise SA’s economic growth beyond 2%, says the National Treasury.
Finance minister Enoch Godongwana says the reforms, geared at kick-starting the economy and making SA an attractive destination for investment, are also expected to add a million jobs to the economy.
Operation Vulindlela, the joint delivery unit by the Treasury and the presidency last week released a progress update on the reforms which showed that of the 26 priority areas, eight have been completed with 11 on track.
This includes raising the licensing threshold for embedded generation, reviving the blue-and green-drop water quality assessment system, revamping the e-Visa system, auction of spectrum and the launch of bid window 6 of the Renewable Energy Independent Power Producer Procurement Programme.
Despite the wins of Operation Vulindlela since its launch in 2020, two critical reforms in the energy sector — the emergency procurement of 2,000MW of energy and raising the country’s energy availability factor to more than 70% — remain a challenge due to long-standing issues including lack of infrastructure and regulations.
“In digital communications, the successful allocation of high demand spectrum not only raised more than R8bn for the fiscus, but recent indications also show that the industry will invest R50bn on the back of this,” Godongwana said on Friday
“In transport, the successful implementation of third party private investors can free up R58bn. In electricity, where we are working with the private sector to unblock the remaining challenges to free up embedded generation, we can realise an investment of R54bn,” Godongwana said.
Business organisations Business Unity SA and Business Leadership SA have rallied around the reform agenda, but voiced concern about the red tape that delayed the lifting of the 100MW licensing threshold for independent power producers to generate electricity.
Similarly, Nombeko Mbava of the Financial and Fiscal Commission — a constitutional body mandated to advise the Treasury and parliament on financial and fiscal matters in the local, provincial and national governments — says the reported progress may be overly optimistic and its results ambiguous.
Mbava points to the progress in the energy sector which is unlikely to have an immediate impact as “the real-world experience impacting the people is still rolling blackouts and load-shedding. Permitting municipalities to procure power directly does not equate to all municipalities fundamentally having the fiscal affordability to buy or sustain buying electricity from the independent power producers. Over and above the institutional inefficiencies in municipal electricity distribution.”
Responding to the criticisms of slow implementation of the reforms, Godongwana said the government would “redouble its efforts to resolve the energy crisis”.
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