Fundamental Economic Reforms are Gathering Pace
By Fiona Wakelin
In his letter to the nation on 12 June, His Excellency Cyril Ramaphosa assured the country that South Africa’s economy is undergoing a fundamental transformation and reforms that will make it more competitive, inclusive and capable of growth. “Since the start of this administration, we have been pursuing far-reaching reforms in ‘network’ industries like electricity, telecommunication, water, ports and rail. We have focused on reforms that are sustainable and transformative rather than temporary solutions that won’t last.”
“It is understandable that the severity of the challenges the country is facing at this time give rise to frustration and impatience. Given the persistence of loadshedding, for example, few people are able to contemplate the impact of a transformed energy landscape. While we are making progress towards ending loadshedding, transforming the electricity market to make it more competitive and cost-effective is critical to the country’s future,” — President Ramaphosa. Continuing with the theme of economic reforms, His Excellency referred to Operation Vulindlela (which we look at in this edition) and outlined progress in the following areas:
Energy
The licensing requirement for generation projects of any size has been removed. As a result, more than 100 projects are now in development, representing over 10 000 MW of new generation capacity and R200-billion of private sector investment. A new Ministerial determination has been issued for the procurement of over 14 000 MW of new generation capacity from wind, solar and battery storage.
Tax incentives for rooftop solar are being implemented for businesses and households, which will drive a significant increase in rooftop solar installations. Eskom is being unbundled into separate entities for generation, transmission and distribution. The Electricity Regulation Amendment Bill is being finalised for tabling in Parliament. These developments are part of establishing for the first time in our country a competitive market for electricity generation. Eskom’s debt burden is being addressed through R254-billion in debt relief, subject to strict conditions. This will enable the company to make necessary investments in its infrastructure.
Transport and Logistics
Transnet Freight Rail is establishing an independent infrastructure manager to enable transparent and accurate pricing of slots on the freight rail network and create a level playing field between public and private rail operators. Partnerships with private terminal operators at the Durban and Ngqura container terminals will be finalised soon. A National Logistics Crisis Committee has been established to improve the performance of ports and rail in the immediate term and drive the implementation of a Freight Logistics Roadmap into the future.
Telecommunications
The completion of the spectrum auction in April 2022 has unlocked significant new investment and will enable expanded network access and reduced data costs. The gazetting of a Rapid Deployment Policy and Policy Direction as well as a standard draft by-law for wayleave approvals will help to accelerate the rollout of telecommunications infrastructure such as fibre and towers.
A final date for the switch-off of analogue transmission will soon be gazetted to complete the digital migration process across the country. Five provinces – Free State, Northern Cape, North West, Limpopo and Mpumalanga – have already undergone the migration and are receiving television broadcasts on the digital platform.
Water
The proportion of water use licence applications processed within 90 days has increased to 70% from 35%. This is helping to speed up investment in sectors like mining, agriculture, forestry and infrastructure. The Blue Drop, Green Drop and No Drop water quality monitoring system has been reinstated. This enables intervention where municipalities are failing to meet minimum norms and standards for water service delivery. A Water Partnerships Office has been established to support private sector involvement in areas such as water reuse, improving wastewater treatment, desalination projects and improving rural water services.
Immigration
The Department of Home Affairs is implementing far-reaching reforms that will make the work visa system more agile and responsive to the realities of the new world of work and attract higher numbers of tourists.
“We are committed to stay the course on structural reform. We need consistency and perspective – not temporary, unsustainable solutions – if we are to improve the lives of South Africans, create jobs, attract higher levels of investment and build an economy of the future,” — H.E. Ramaphosa
