Faster reforms will spur faster growth: Ramaphosa

Mail & Guardian

07-05-2025

President Cyril Ramaphosa. (File photo)
President Cyril Ramaphosa and the
Ramaphosa said the
'Our economy needs to grow, everyone agrees, in the GNU and outside the GNU. It needs to grow much faster to create the jobs that our country needs to achieve the prosperity that we all yearn for,' he added, nodding to the fact that the reform initiative was one thing on which his party and its coalition partners agreed.
'Growth is the only way to achieve fiscal sustainability, and social progress in our country.'
Ramaphosa said this was why the coalition government committed itself to sustaining the momentum achieved by Operation Vulindlela in its reform agenda, adding that these reforms had a direct impact on the lives of South Africans.
'So we need bold, far-reaching reform initiatives to revive and reshape our economy. Our immediate priority is to follow through on the reforms that we have initiated and the reforms that are already underway so that they can reach their full impact.'
A competitive electricity market was a top priority, he added.
Duncan Pieterse, the director general of finance, said the programme would seek to achieve 'radical economic reform' over the next five years to spur growth.
Phase two of Operation Vulindela expands to seven the target areas of the reform initiative launched in 2020. The first stage focused on ensuring electricity stability and water supply, improving the logistics system and overhauling the country's visa regime.
While the unit would over the next five years drive the initial reform efforts to conclusion, widening its focus was critical to target stumbling blocks to inclusive and sustained growth.
'Phase II will therefore target both long-standing and emerging constraints on economic growth and the new reform areas that matter for inclusion, resilience and spatial equity.
'These include strengthening the effectiveness of local government service delivery – especially in metros – leveraging digital public infrastructure to modernise state capabilities and unlock economic participation and finally driving urban densification and spatial integration to reduce transport costs and connect people with opportunity.'
The treasury team will draw on lessons from the first phase, such as assembling sectoral task teams and setting measurable targets.
'Our challenge is execution at scale,' Pieterse added.
'We need to mobilise the full capacity of the state, crowd in the private sector and create conditions for markets to work more effectively. This means creating an enabling environment for investment into key sectors of the economy.'
He said the relevant departments will be key implementors in this regard 'as the problem solvers'.
The National Treasury was enhancing fiscal instruments and guarantee frameworks to enable more blended finance. This applied in particular to electricity transmission, freight rail and water.
Operation Vulindlela was ultimately, Pieterse added, about reinforcing credibility that the government can deliver on its reform agenda, and that institutions can work together and meet reform targets, resulting in more jobs and a more resilient economy.
It was launched in 2020 by then finance minister Tito Mboweni, and has been credited with saving the economy from collapse during the 2023 load-shedding crisis.
Ramaphosa noted that South Africa had been hit by wave upon wave of hardship, first the ravages of state capture, followed by the Covid pandemic and then an electricity crisis 'of an extraordinary type that made South Africans very angry, frustrated and dejected'.
But reforms in the energy sector through the efforts of the Operation Vulindela team have been salutary, he said.
'These reforms that we embarked upon have enabled investment in energy generation, and have also resulted in billions of rands in new investment in renewable energy in every part of the country,' he said, adding that it sparked an economic revival in particular in the Northern Cape thanks to a concentration of projects.
Barriers to port infrastructure and water investment were falling away and data costs were lower, though far from low enough, the president said.
The unit had allowed government departments to overcome a reluctance to work together, and to persuade business and state-owned entities to work more closely with the government.
'One of the key achievements that we continue to make is to break down the silos in government and to continue to enable departments to work together and to enable colleagues to walk away from this mentality of doing this on their own.'
Godongwana said once fully implemented, the reforms initiated in phase one will provide a significant boost to the economy in the medium term once fully implemented, while phase two was aimed at ensuring long-term growth.
'I think one of the issues that need to be part of this restructuring is procurement reforms, quite a challenge,' he said, adding that this had just occurred to him while looking at the list of priorities.
The minister, who will deliver his redrafted budget for 2025 on May 21, said since the treasury had over the years completed more than 240 spending reviews, it was well-placed to assess whether expenditure was well-aligned with policy.
'The road ahead is challenging, but with agility and commitment to reform, we can achieve greater competitiveness and a more inclusive economy in line with this administration's priorities.'
Rudi Dicks, the head of project management in the presidency, said it was significant that phase one of the project had unlocked 22.5 gigawatts worth of renewable energy projects, representing an investment of R400 billion, and seen waiting periods for water use licences reduced from 300 days to 90 days.