Terren Creamer | May 12, 2025
The government's business partnership follows a recent meeting between the Cabinet Minister and senior South African business leaders, and agrees to what is called the “enhanced stage” of priority interventions essential to economic growth and job creation.
The agreement came after incorporating three new reform priorities incorporating three new reform priorities, in addition to the four original focus areas of electricity, logistics, water and visa reform, including the decline of metropolitan councils, spatial inequality and digital transformation efforts.
Senior business leaders participating in the government's business partnership welcomed the launch of Operation Vulindlela Phase II, but also reaffirmed the continued partnership with selected focus areas in 2023, including energy, logistics, crime, corruption and youth employment.
However, Adrian Gore, the partnership's business co-executor, said he also agreed that a gradual change in the pace of decision-making and execution is necessary in light of a recent downward revision to South Africa's growth outlook.
The International Monetary Fund has cut South Africa's 2025 growth forecast from 1.5% to just 1%, potentially easing the 1.9% growth outlook released in February by the National Treasury, when it makes its third attempt to pass the 2025/26 budget on May 21.
This despite the announcement of a downgrade at the peak of the tariff war that unfolded after US President Donald Trump announced the so-called mutual tariffs before he suspends in all countries other than China. However, on May 12, the US and China announced a 90-day suspension. This could help avoid the massive slump in global growth that was previously projected.
Nevertheless, it is certainly well below the minimum 3% target set by the government's business partnership to begin reducing South Africa's very high unemployment rates, even as new growth forecasts have been released by the State Treasury.
“We are entering this accelerated execution 'sprint' with a true sense of urgency,” Gore said in a statement, warning that the progress made so far has been insufficient.
“We need to double our collective efforts to shift our country onto a sustained upward trajectory and realize our shared ambitions of growth, employment, a more positive narrative and increased investment,” he added.
In the power space, the partnership will continue to pursue improvements in Eskom's energy availability coefficients and will unlock delays to adopt new generations to continue to load, including resolving grid access and allocation bottlenecks.
President Cyril Ramaphosa highlighted plans to procure grid infrastructure over 1,000 km from individual independent transmission projects using the launch of the second phase of Operation Vulindlela, and recommended creating a level competition area of ​​competition for the establishment of independent transmission systems operators.
Meanwhile, at TransNet, the partnership focused on growing, partly by opening up rail and port systems to private sector participation, through the stabilization of state-owned enterprises.
“Major progress has been made to lay the foundation for sustainable acceleration measures, including the finalization of the Transnet Network Statement, the launch of information requests to attract private investment in ports and rail infrastructure, and the national energy regulator in approving South Africa's power wheel regulations.
“These reforms will allow for broader private sector participation in energy, transportation and logistics.
“Both focus areas of crime, corruption and youth employment are primarily tracked against plans with long-term time horizons,” the joint statement released by the partnership said.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
