While South Africa is starting to see the fruits of energy sector reforms, it still has a long way to go to fix the water, and transport and logistics sectors despite recent progress, says business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso.

BLSA supported the National Logistics Crisis Committee (NLCC) in its efforts to develop the Freight Logistics Roadmap, with an important success being the establishment of the Transnet Rail Infrastructure Management company, with its own management and reporting structure separate from State-owned Transnet Freight Rail.

It will oversee the initial process of ensuring that the rail network is opened to private train operating companies, she adds.

“Water reform has made solid progress this year with [structural reform programme] Operation Vulindlela playing a critical role in getting the new National Water Resources Infrastructure Agency established to ensure dams and connecting infrastructure are appropriately developed,” she notes.

However, as with energy, many water-related problems need to be addressed by municipalities, which is a rapidly emerging major crisis area, she emphasises.

“During Operation Vulindlela’s second phase, the focus will turn to tackling local government service-delivery issues, such as water shedding and inadequate services that hurt businesses. This is critical work if we seek to sustainably boost the country’s economy.

“Turning around the many dysfunctional municipalities is possibly the most difficult goal facing Operation Vulindlela. Most municipalities are run by political appointees, and there are major skills gaps,” Mavuso highlights.

BLSA has already been contributing to partly closing these gaps through its contributions to the Technical Assistance, Mentorship and Development project of the National Business Initiative, which seconds experienced people out of retirement to mentor and develop local government employees.

Further, BLSA and development and humanitarian aid fund USAID funded a project to install working toilets in eight schools in the Eastern Cape and to build capacity in the provincial department and various municipalities in the province.

“Basic service delivery is essential not only to our economy but to its future. Getting water to these schools required working with municipalities to fix basic infrastructure, which also means residents and businesses benefit.

“While modest in scale, it gave me hope that we can fix things at local government level, and I am optimistic about what we can do with Operation Vulindlela and others as we focus attention on this critical area of service delivery next year,” Mavuso says.

BLSA will focus on the critical area of service delivery during 2025, while also supporting other important areas of reform, including in the criminal justice system where BLSA will continue to support the National Prosecuting Authority through the memorandum of understanding that enables it to bring in private-sector expertise for investigations.

This is critical to enabling the country to escape the global anti-money laundering organisation Financial Action Task Force grey list by successfully prosecuting corruption, Mavuso notes.

Further, the energy sector has shown the most progress so far of the country’s three network industries, namely energy, transport and water.

The Resource Mobilisation fund set up by Business For South Africa (B4SA), with contributions from the private sector, proved to be particularly useful in terms of contributing expertise and resources when required, she says.

“This is an example of how direct assistance from organised business plays a key role in maintaining the momentum of reform processes.”

However, new sets of problems continue to arise. While the Electricity Regulation Amendment Act was passed and enabled a raft of policies flowing from Necom and the Energy Action Plan to be implemented, legal challenges, by municipalities concerned that they may lose revenue from electricity sales, have been mounted, she highlights.

"Business and government working alongside each other is starting to pay off, with three consecutive quarters free of loadshedding and with figures from our ports showing that wait times have been reduced since the worst of the crisis, as well as improvements in the flow of goods on rail."

The B4SA formation in particular has become a key forum for government and business to engage in solving our challenges. This year has shown it can work, she adds.

"But there is much more to do. The disappointing third-quarter GDP growth figures revealed that parts of the economy are still struggling, particularly agriculture. The work we’re doing through the NLCC will help, but climate and weather will also play their part," she emphasises.