Operation Vulindlela has gone some way towards kickstarting stalled economic growth in South Africa, but progress remains slow and uneven, while investment spending is only slowly turning the corner, according to a measure launched by a unit of the Bureau for Economic Research on Wednesday.
The measure, known as the the reform barometer and complied by the Impumelelo Economic Growth Lab, found that while there has been some progress in reforming regulatory and legal frameworks, the slow pace of fixing water issues and ongoing financial distress in many municipalities exposes the gap between policy design and operational outcomes.
The barometer will track the same set of metrics — the overall economy, electricity, logistics, water, visas, local government, spatial integration, and digital public infrastructure — as the current focus areas of Operation Vulindlela, the joint initiative between the presidency and the National Treasury launched in 2020 to accelerate structural reforms, boost economic growth and improve efficiency in network industries.
The BER will publish quarterly updates of the barometer to coincide with Stats SA’s publication of GDP data, and will assess whether structural reforms are translating into measurable improvements in economic performance.
“The barometer assesses progress along a spectrum ranging from slow progress to strongly positive outcomes,” said co-author Rose Murunzi. The assessment may vary depending on developments in each reform area, for example, if progress accelerates, stalls or is reversed, she said.
“The barometer was introduced to track progress in key Operation Vulindlela reform sectors. Unlike the BER’s traditional confidence indices, which are survey-based measures of sentiment among businesses and consumers, this barometer focuses on structural reform progress and performance in key enabling sectors of the economy.”
The initial barometer scores overall growth and confidence as “moderately positive”, noting that the economy has stabilised after the ravages of the Covid-19 pandemic. Still, infrastructure issues, limited municipal capacity and external risks are hindering the pace of expansion and investment.
“Sustaining the recovery will depend on whether improved sentiment and reform momentum translate into stronger fixed investment and measurable improvements in economic performance,” the report states.
“Ultimately, the effectiveness of South Africa’s reform agenda will be judged not by policy commitments but by whether reforms translate into sustained investment, improved infrastructure performance, and faster economic growth.”
The report notes that Transnet’s recovery gained momentum in 2025, with stronger rail and port performance lifting trade volumes. Throughput at Durban Container Terminal Pier 2 has recovered modestly since late 2023, but sustained underperformance at the Cape Town Container Terminal has escalated into a material export risk during the 2025/26 deciduous fruit season, it adds.
The barometer also highlights slow progress in water sector reforms, with service-delivery at South African municipalities remaining weak.
“Widespread non-compliance, high non-revenue water, and a growing maintenance backlog highlight the persistent gap between reform progress and the reality on the ground,” the BER says.
The report notes that the country’s 2023 Blue Drop and 2022 Green Drop reports — regulatory assessments by the department of water & sanitation that evaluate municipal water services — reveal a systemic deterioration across every province.
“Large clusters of underperforming municipalities in the Free State, Northern Cape, Mpumalanga, and the Eastern Cape point to deep-rooted institutional weaknesses, while the inclusion of several major economic centres shows that infrastructure decline is no longer a peripheral or rural issue,” it says.
The barometer is “neutral” on visa reform, another key item under Operation Vulindlela. Visa and digital reforms signal policy progress, but their practical effect has been constrained by stalled application categories and inconsistent adjudication, it states.
It notes that international tourist arrivals reached record levels in 2025, but were driven primarily by regional and cross-border travel rather than by the impact of recent visa reforms.
The highlight of the barometer is the tangible progress in digital government infrastructure — graded as “strongly positive”. In the third quarter of 2025, the government made tangible progress in this regard with the start of the MzansiXchange pilot for cross-departmental data sharing. Also, work has started to link government payments to verified accounts and wallets.
“While these initiatives show meaningful steps are being taken towards creating more integrated and accessible digital public services, achieving a sustained impact will depend on effective implementation and co-ordination throughout the year,” the BER says.
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