The statement from the presidency on Tuesday was upbeat: “President Cyril Ramaphosa today met with ministers and senior business leaders under the Government Business Partnership,” it said, “formally commencing Phase Three of the partnership with a shared commitment to placing economic growth at the centre of the partnership’s work in 2026.
“The meeting reviewed progress achieved during Phase Two, during which important gains were made in stabilising the energy and logistics systems. Investors are increasingly responding positively to South Africa’s economic trajectory …”
Possibly, but not untypically, Ramaphosa too easily gets ahead of himself. Apart from a spurt of privately financed renewable energy generation capacity, which was essentially Phase One, not much “reform” has actually occurred.
There are still no private sector train sets on our railways, and there probably won’t be for at least another two or even three years. And while Eskom has escaped load-shedding, Transnet carried 5.5% more freight in 2025, and waiting times at the ports have reduced, these have not been driven by policy reform but simply by managers doing their jobs better.
A scary fact is that as Ramaphosa pushes for more reform other forces are pushing back.
Much the same would apply to the strength of the rand; it’s due largely to a serious collapse in the value of the dollar under the demented leadership of US President Donald Trump, or record prices on a JSE following an international trend, or being removed from the Financial Action Task Force greylist, which involved implementing a series of instructions from the organisation.
Reform, if it is ever to mean anything to the average person, must surely reflect the actual implementation of new policy choices beyond mere announcements of intent.
A scary fact is that as Ramaphosa pushes for more reform other forces are pushing back. Big institutions like Eskom and Transnet have deep and conservative inbuilt survival instincts. Eskom is fighting tooth and nail to hold on to big assets like its transmission system before it is spun off as an independent company. Transnet is hardly rushing to concession much more than the container terminal in Durban, and the initial train slots for the private sector are likely to be a tiny fraction of current traffic.
Grim dilemma
At the end of this line is a stark choice — either South Africa can offer industrial investors affordable power or it can’t, and the government has sunk such big debt into Eskom to keep it alive it is almost impossible to imagine how it gets its money back if Eskom comes under pressure to cut its tariffs.
The only possible resolution is that private sector competition forces efficiencies in Eskom, but then the inevitable cost savings at Eskom or Transnet become a huge political problem for the Treasury. Either that or they put up enough of a fight to slow things down until Ramaphosa is no longer in office.
In terms of jobs or industry, the almost 1,000% increase in Eskom tariffs since Jacob Zuma entered office in 2009 has the country in a fiendish trap: we are increasingly unable to process the minerals we mine here, and refining has moved east — mainly to China — because our electricity prices render smelting or processing locally uncompetitive. To keep Eskom alive the ANC has lost control of our rich geology.
A recent paper, “The Return of Matter: Western Democracies’ Material Impairment”, by an Australian investor, Craig Tindale, argues that while the West and their allies “control a significant proportion of the world’s raw geology, the ‘upstream’, they have systematically abdicated the critical industrial processes that convert geology into sovereignty. China has successfully monopolised the ‘midstream’, the heavy industrial capacity to refine, smelt, separate and purify these metals into usable forms.”
Tindale’s paper shook governments around the world when it was published late last year, and rightly so. It asks hard questions of countries such as South Africa and the people trying to fashion industrial policy here. And there are just no easy answers.
• Bruce is a former editor of Business Day and the Financial Mail.
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