The government says its move to liberalise network industries, including energy, communications and logistics, has unlocked R500bn in private investment since 2020.
A report released by Operation Vulindlela, a joint initiative between the presidency and the Treasury, shows that the government has so far achieved 89% of its initial targets to unlock administrative and other operational bottlenecks in areas such as energy, telecommunications, transport, water and tourism.
The reforms have been central to President Cyril Ramaphosa’s plans to speed up economic growth. The reforms include stabilising the supply of electricity and water, reducing the cost of digital communication, improving the efficiency and competitiveness of the country’s ports, and developing a visa regime that will attract critical skills and unlock growth.
“While the impact of these reforms may not be immediate, it will be significant,” said presidency director-general Phindile Baleni.
Regulatory changes have resulted in an increase in private investment in electricity generation, with a pipeline of more than 22,500MW of confirmed projects in development.
“The reform of the energy system [is] now far advanced with the passage of the Electricity Regulation Amendment Bill and the establishment of the National Transmission Company of SA, among other key milestones.
“We are already seeing the impact of these reforms in reduced load-shedding and in the proliferation of new energy projects,” Baleni said.
SA has been without load-shedding for about eight weeks — the longest stretch without rolling blackouts since February 2022. Despite several generating units failing last week, Eskom was able to keep the power on.
Eskom data shows fewer breakdowns for the financial year to date (April 1 to March 16) than in the corresponding period last year. In the period during 2023 about 35% of total generation capacity was offline due to breakdowns, while unplanned breakdowns this year stood at 28%.
Removing the licensing threshold for embedded generation projects and increased project approvals has meant that projects can add capacity to the grid more quickly.
A pipeline of 136 projects with a combined capacity of approximately 22,500MW has an expected investment requirement of about R390bn, the Vulindlela report said.
On the telecommunications front, the Independent Communications Authority of SA (Icasa) completed the auction of spectrum — radio frequencies allocated to the mobile industry and other sectors — raising R14.4bn for state coffers. The regulator had initially planned to raise R8bn.
Achievements in the logistics sector include stabilising Transnet, the establishment of the national logistics crisis committee and the selection of an international terminal operator to partner with Transnet at SA’s largest container terminal — Durban Pier 2 — which handles 72% of the port’s throughput and 46% of SA’s port traffic.
“The National Treasury has estimated that resolving Transnet’s immediate operational challenges would increase GDP by 0.9% above the baseline by 2031. Implementation of the comprehensive reforms outlined in the Freight Logistics Roadmap would further increase capital stock and thereby support long-term growth,” the report reads.
“In the water sector, the backlog of water use licences, which once stood at well over 1,000, was cleared and the licence application system improved to reduce processing times. Concrete steps have been taken to strengthen institutions in the water system, improve regulation and invest in infrastructure,” Baleni said.
The report says: “Finally, reforms have been implemented in the visa system to encourage the growth of tourism and enable the economy to attract the skills that it needs to grow.”
The eVisa system was now available in 34 countries and visas were waived for visitors from 135 countries.
“The recommendations of the work visa review, which was completed last year, are now being implemented, including the establishment of a trusted employer scheme and a points-based system for work visas.”
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