Evaluating Government Reforms for Maximum Effectiveness

The prosperity of our organization is deeply intertwined with the wellbeing of the government.

When the government falters, the nation bears the repercussions.

A nation facing hardships leads to businesses struggling to succeed.

This observation underlines an economic reality, beyond mere emotional appeal.

This underscores why structured business entities, such as Business Leadership South Africa (BLSA), allocate considerable resources to assist the government in implementing reforms aimed at cultivating a better business environment, which in turn promotes economic expansion and job creation.

Allow me to outline the issues we are facing.

Youth unemployment affects two-thirds of our younger demographic, posing a critical threat.

The turmoil observed in July 2021 was not simply about law enforcement but also highlighted issues of poverty and marginalization.

When millions are excluded while a privileged few prosper, it creates conditions for instability that cannot be mitigated by private security.

Businesses cannot thrive in a declining state.

In the last ten years, we have encountered obstacles like load shedding, which has cost us billions; inefficiencies at ports, which have hindered our export potential; and rising crime rates that have raised operational costs.

The effectiveness of economic reforms should be measured by their ability to bring about real transformation.

Do they simplify business processes and lessen expenses?

When governmental frameworks falter, businesses shoulder the burden through increased security costs, backup energy solutions, alternative logistics, and reduced productivity.

This ultimately diminishes our competitive edge as a nation, exacerbating our challenges and restricting our standing in the global market.

However, our collaboration with the Government of National Unity (GNU) has produced meaningful results.

The GNU has tackled visa backlogs that were obstructing tourism revenue and the influx of skilled labor.

Thanks to the combined efforts of the public and private sectors, we have significantly reduced the impact of load shedding.

Our initiatives are not mere charitable acts; they are investments with tangible returns.

Every rand spent on supporting governmental reforms is a rand that could have fueled vital business development, expansion, or innovation.

Our shareholders and stakeholders rightly question why businesses must absorb the costs of government inefficiencies.

There is an opportunity cost in redirecting our top talent to manage state issues instead of enhancing our enterprises.

It is crucial to emphasize that we do not desire a prolonged dependency.

Our efforts primarily aim to address the consequences of state capture, which has severely weakened much of our governmental structure and stalled our progress for years.

Our initiatives must have specific and measurable targets.

Consequently, we must ensure that the resources we utilize follow a clear trajectory towards achieving defined objectives.

Later this week, we will introduce a significant new initiative from BLSA, the BLSA Reform Tracker.

This public resource will serve as an online platform to oversee various governmental reforms, assessing progress, celebrating achievements, and identifying challenges.

We will provide additional information about this initiative during events with our members and the media on Thursday in Johannesburg and Friday in Cape Town.

This tool will be available to everyone, enabling both public and private sectors to effectively monitor reform progress and strengthen collaborative efforts to improve the business landscape.

It will track a variety of reforms—not just those involving government partnerships—and I hope it accelerates progress for effective implementation.

Business is ready to invest in infrastructure and skills development, but we need a government equally committed to reform and effective execution.

This partnership must be structured, with clear objectives, timelines, and accountability measures.

We require short-term goals, measurable impacts, and ongoing evaluations of our progress. The BLSA Reform Tracker will aid in this.

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A vital area in need of reform is South Africa’s electricity sector. We have made significant advancements; however, recent legal challenges regarding the licensing of electricity traders by Eskom could jeopardize this progress.

The ongoing legal issues could obstruct the reform process, and last week, BLSA and BUSA issued a joint statement strongly opposing Eskom’s efforts to hinder these reforms.

I commend Electricity Minister Kgosientsho Ramokgopa for his swift action.

Last Friday, he issued a statement urging Eskom to withdraw its legal challenge.

The minister acknowledged Eskom’s concerns that a functional electricity market should operate under fair and rule-based frameworks.

Nersa is presently engaged in an expedited three-month process to establish this framework, and the minister has called on Eskom to pause any legal actions until this process is finalized.

The minister has demonstrated his dedication to these reforms, providing the essential leadership needed to keep them on course.

The government’s reform agenda is clear and promising.

Business has fully backed this initiative, which has successfully attracted private investments totaling billions in new electricity capacity.

Eskom must align with this reform momentum.

Our focus should be on rapidly implementing these reforms rather than obstructing progress through legal disputes.

These planned reforms will enable electricity trading in South Africa, allowing various generators to supply electricity to different customers across the network.

This is essential not only for electricity security but also for reducing prices after sustained increases.

Eskom was the first entity to receive a trading license, followed by five licenses granted to private sector participants.

Eskom’s transmission subsidiary is set to evolve into an independent systems operator responsible for managing the grid to connect generators with consumers.

This should be our primary objective—ensuring grid capacity to support the developing competitive electricity market in the country.

*This column was originally published in the Business Leadership South Africa (BLSA) weekly newsletter. The author Busisiwe “Busi” Mavuso, is the CEO of BLSA.

*The views expressed by Busi Mavuso in this column do not necessarily reflect those of The Bulrushes