Investors are starting to believe in SA’s reform narrative, albeit cautiously, said Roy Havemann, senior economist and head of the Bureau for Economic Research’s (BER’s) Impumelelo Economic Growth Lab.
Offshore investors are showing renewed interest in the country’s long-term prospects, especially as structural reforms start to take shape, Havemann told delegates attending the launch in Sandton of Business Leadership SA’s (BLSA’s) reform tracker on Thursday.
“[Investors] are buying our [reform] story with a little bit of a pinch of salt. They want to see that it’s actually being delivered and the momentum continues, Havemann said. They want to see the “actual results” of the reforms translate into more jobs.
“We’ve seen bigger investors, more long-dated pension funds from offshore coming to see us…. These are people with real money that really want to invest. [I’m] not sure they’re buying our bonds quite yet, but I think the story is improving.”
The BLSA Tracker is the first independent effort to monitor the progress of the government’s promises of reforms since 2019.
The tracker was designed to assess reforms that are positive for the business environment, across criminal justice, governance and economic categories, which the organisation sees as key to unlocking economic growth.
The about 240 reforms comprise a mix of those continuing from the previous administration and ones from the government of national unity (GNU).
Of all the reforms, BLSA has identified those it believes are vital to developing an efficient state and enabling business to function smoothly. They include Operation Vulindlela (OV) Phase 2, the presidency and National Treasury partnership to unlock economic growth; municipal reforms; as well as improvements in the supply of and access to affordable housing and passenger rail services.
“We are acutely aware that the optimism, which came from the private sector and citizens in our country with the formation of the GNU after the 2024 general election, is at risk of being undone if reforms do not materialise at the speed that is needed to actually implement them,” said Maropene Ramokgopa, minister in the presidency responsible for planning, monitoring & evaluation.
“Let us make the reform tracker a symbol, not only of accountability, but of a shared ambition that binds business and government together in service to our nation.”
Over the past 18 months of tracking, 11% of the reforms have been fully completed. Among the shortcomings identified by the tracker are the exit of two-thirds of construction firms from the sector, thousands of stalled housing projects due to unresolved planning approvals, and the lack of intervention by OV Phase 2 to address banks’ continued reluctance to lend in the affordable housing market.
Asked where the private sector could assist in getting things back on track, Business Unity SA (Busa) CEO Khulekani Mathe said: “In many instances in SA we’re not dealing with reforms — we are dealing with recovery,” which he described as situations where things have “crashed” beyond the point of reform.
“Think about local government. There’s no reason for Johannesburg to be in the situation it is in,” he said. The metro has everything a small municipality doesn’t have — including a strong private sector “and yet we allowed it to crash”.
Asked about the slow progress of government reforms, BLSA CEO Busi Mavuso said: “We need to understand — and maybe this is the tragedy — when we have been in the doldrums for so long as a country, we want to see change and we want to see it now. Reforms, by their very nature, are long term.”
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