When President Cyril Ramaphosa celebrated Operation Vulindlela’s successes and launched its second phase at a flower-bedecked gathering at the Union Buildings this week you had to wonder whether he was doing its chances more harm than good.
So successful has the unit been that the president has been inundated with demands to be part of it, said presidential spokesperson Vincent Magwenya. Ramaphosa suggested he might well add procurement to a new phase of Vulindlela. Talk about a poisoned chalice.
One of the reasons Operation Vulindlela has managed to gain traction for key economic reforms since its launch in 2020 was its focus on a limited list of five priority areas for structural reform.
This is something the government has always struggled with. Indeed, one of the reasons reforms have clearly stalled this year, after last year’s rapid strides, is that the president and his colleagues have been all over the place.
Between the Group of Twenty (G20), the budget debacle, the government of national unity and the ANC’s own internal battles, they have not had the bandwidth to focus on the economy. And it shows.
This week’s launch was itself a victim. Plans for the second phase, which has added three new priority reforms, were first proposed as far back as June and were meant to have been signed off by cabinet earlier this year and announced soon after the February budget. Yet here we are in May.
Instead of hyping the Bureau for Economic Research (BER) “fairy-tale” scenario of 3.5% growth, as he did again this week, the president might do better to note that the world has changed — and not in a friendly way. The BER has cut its own growth forecast for this year to 1.5%, as has Moody’s, and they are on the optimistic side compared with Standard Bank at 1.3% or the IMF at 1%. Rather than hype Vulindlela, the president could frame realistic expectations while pushing his own ministers to focus on enabling growth instead of regulating it out of existence.
The unit will need political cover from the president more than before.
Operation Vulindlela’s report back this week shows it has made good progress on the first phase’s five priority areas. One, the spectrum auction, has been completed. In the other four areas, particularly electricity and logistics, much still needs to be done to open up markets to competition.
But the structural reforms on which Vulindlela focuses are just that: structural. It works with departments and state-owned entities to change policy and legislation and put in new enabling regulations and new institutions. The department and SOEs are the “implementing agents” that have to make it happen. And with some exceptions, most notably home affairs with the new visa system, those reforms are not happening very fast. Naturally, reforms often face resistance and vested interests, which is why they don’t just require Vulindlela’s technical work and collaboration but political leadership and focus.
The three new areas Vulindlela has taken on for the second phase could be even more challenging, particularly local government reforms. There is a risk its effectiveness could be diluted now that it has no less than seven items on its list of “priorities”. And the politics of this new set of reforms could be even more complex in the first round.
While until now it has worked mainly with dominant SOEs such as Eskom and Transnet or dominant departments such as home affairs or water & sanitation, now it is a case of working with multiple metros and even more municipalities, each with their own, sometimes toxic, politics. The unit will need political cover from the president more than before.
And while all the publicity and praise being showered on it may help SA’s efforts to convince investors that the government is serious about growth, the unit — which in its first few years worked quietly behind the scenes — is now under pressure to spend more time on roadshows than reforms.
As Magwenya reminded us this week, Vulindlela was the brainchild of late finance minister Tito Mboweni, who named it for the Brenda Fassie song VuliNdlela (“Clear the Path”).
• Joffe is editor-at-large.
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