Under pressure to up government delivery and SA economic growth ahead of a key election year in 2024, President Cyril Ramaphosa met senior business leaders again on Tuesday, together with key cabinet ministers, to receive an update on progress made in the closer collaboration between government and the private sector.
Ramaphosa’s charm offensive with business comes as National Treasury looks to curb state spending, with budget cuts expected in the upcoming mid-term budget speech by Finance Minister Enoch Godongwana on 1 November.
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The touted budget cuts will mean government will rely more on the private sector to boost GDP growth. However, the private sector is pushing for further economic reforms to not just deal with SA’s electricity crisis, but also logistics bottlenecks and corruption.
Many of the business leaders Ramaphosa met yesterday would have also been at the recent Brics Summit in Sandton last month.
The closer collaboration with the private sector was initiated in June.
It is backed by organised business bodies, including Business Unity South Africa (Busa) and Business Leadership SA (BLSA), with the aim of “significantly growing [the] economy and restoring public and investor confidence through critical interventions to address the key challenges of energy, logistics, and crime and corruption”.
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A collaborative journey begins between government and business
“We have established an effective working relationship between government and business to tackle the most immediate challenges facing our economy,” Ramaphosa said in a joint statement.
“While we have identified key milestones and set out the processes to achieve these, the real test of our success will be in the results felt by ordinary citizens. We are confident that, by working together and marshalling the significant resources and expertise that exist in our country, we will end load shedding, fix our logistics system, and tackle crime and corruption,” the president declared.
Discovery boss and co-convenor of the business delegation Adrian Gore said: “It’s early in the partnership, but the collective work rate has been excellent and there are clear areas of progress…”
Gore added that “putting in place a viable critical path per focal area with clear short-term deliverables against which we collectively measure our progress is crucial for building confidence in our ability to deliver.”
Good traction
According to the joint statement, issued on Wednesday following Tuesday’s high-level meeting, good traction has been achieved within the energy focal area, through the National Energy Crisis Committee (Necom), which has been established to ensure delivery of the Energy Action Plan(EAP).
“Business and government reaffirmed the importance of the EAP as the country’s blueprint for reducing the severity and frequency of load shedding in the short term and ending it altogether in the long term,” it said.
“Full implementation of the plan across three core priorities – improving the performance of Eskom’s existing power stations; adding new generation capacity; and reforming the energy sector – will result in over 12 GW of generation capacity being recovered or added to the system from Eskom and the private sector by the end of 2024,” it noted.
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As part of the collaboration, Busa CEO Cas Coovadia and Martin Kingston, chair of the Steering Committee of Business for South Africa (B4SA), noted that business is mobilising additional capacity and skills to support implementation of the EAP.
“This includes nearly 130 volunteers from the private sector who are being coordinated through the Energy Council of South Africa to work in partnership with Eskom and government. The deployment of technical support teams to five power stations – Kendal, Kriel, Majuba, Matla, and Tutuka – is on track, in addition to ongoing support for the return of Kusile Units 1 to 3,” the noted.
The Electricity Regulation Amendment Bill has been tabled in parliament, and the public comment period is underway.
“Government is engaging closely with parliament to prioritise the passage of this Bill, given its crucial importance for the reform of the energy sector. Encouraging progress has been made in the establishment of the National Transmission Company of South Africa, with all three licenses approved by the National Energy Regulator of SA [Nersa], and the appointment of an independent board is in process,” the joint statement pointed out.
“The One Stop Shop for energy projects has been established, and a Memorandum of Understanding has been signed with the Energy Council to support enhancement of its capacity and systems to further streamline regulatory processes and facilitate private investment in energy generation,” it added.
Freight Logistics Roadmap
The parties noted that on the logistics side the collaboration is centered on ensuring implementation of immediate operational interventions, which have already been defined, alongside the development of the Freight Logistics Roadmap.
“Government has committed to finalise the roadmap, which will outline a sequenced set of actions to fundamentally reform the logistics system, by the end of October2023.”
“Business emphasised the urgency of this roadmap in the context of the ongoing challenges in the logistics system… Six of the eight work streams of the National Logistics Crisis Committee [NLCC] are now fully operational, while the remaining two will transition from Operation Vulindlela,” the joint statement pointed out.
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“Interventions to improve the operational performance of the multimodal bulk freight rail network and port system are well underway through the NLCC. Corridor Recovery Teams have been established for five strategic corridors, comprising Transnet managing executives, industry representatives and independent experts, and a delivery plan has been developed with specific actions and timeframes to achieve the targeted increase in freight volumes,” it said.
“Business and government further emphasised the need to support the board of Transnet in its turnaround plan in order to drive operational improvement and sustainability,” it added.
Crime and corruption
The parties highlighted that law enforcement agencies are working to protect rail infrastructure through a range of interventions, including aerial surveillance on the North and Central Corridors as well as the Majuba rail line.
“In the crime and corruption focal area, current engagements centre on building capacity within the National Prosecuting Authority [NPA] and Directorate for Priority Crime Investigation, along with the modernisation of the 10111 emergency response centre and collaboration between industry and the SAPS to address crimes targeting infrastructure,” the statement said.
“The NPA Amendment Bill has been tabled to establish the Investigating Directorate as a permanent entity with investigative powers. This Bill responds to a key recommendation of the State Capture Commission of Inquiry, and will strengthen the capacity and independence of the NPA to tackle corruption-related crimes,” it added.
Ramaphosa is set to have a further joint government-business high-level meeting “in six weeks’ time to assess progress on these commitments”.
“During this period, the immediate focus will be on ensuring the passage of critical reform legislation such as the ERA Bill and the NPA Amendment Bill; scaling up technical support for power station performance recovery; finalising and adopting the Freight Logistics Roadmap; and establishing a joint delivery mechanism to coordinate agreed interventions to tackle crime and corruption,” the statement noted.
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