State-owned logistics agency Transnet has taken tentative steps towards limited engagement with the private sector, but there should be large-scale concessions of port and rail capacity to drive competition between ports and rail corridors, says business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso.

The shift in focus towards export competitiveness, which can contribute to putting South Africa on a high-growth and job-creating trajectory, is one of the positive signals from trade and industrial policy changes.

Logistics is a crucial area for the business environment and it is important to improve rail and port performance.

"South African business should be spoilt for choice through which ports and rail routes it sends its goods, but we remain far from achieving this vision.

"Transport minister Barbara Creecy has indicated that she takes private sector participation seriously in resolving the challenges. I welcome the sentiment, but we have yet to see it translate into meaningful change," she says.

The Government of National Unity (GNU) built confidence that the profound changes to the electricity system that were committed to before the elections will continue to be implemented.

"While it is essential that electricity stability and sustainability be achieved, we should now turn our attention to its cost. Eskom may well need to be charging more for electricity to ensure its sustainability, but last week’s news that Eskom has requested a 36% hike for its next financial year is still a shock.

"It reinforces how important it is that we consolidate reforms that will lead to a competitive electricity supply market that should drive prices down," Mavuso emphasises.

Other reforms to enable key infrastructure must similarly follow through to effectiveness, she adds.

"Water is an obvious area. The Lesotho Highlands Water Project’s main water pipe will close for six months for planned maintenance in October. The work has been planned for years and is timed for the rainy season when dams are full, but it is a reminder of how dependent we are on limited infrastructure," she highlights.

Further, the South African National Water Resources Infrastructure Agency was developed by the previous government, but its enabling legislation was signed into law by President Cyril Ramaphosa in August.

"The agency needs to be fully set up and operationalised. It will drive investment in new bulk water infrastructure, including through public-private partnerships," avers Mavuso.

"In general, the relationship between business and government has seen marked improvement with the GNU, and there are many productive areas of cooperation that are contributing solutions to our challenges as a country."

Financial markets have signalled their optimism, with the rand 7.5% stronger, the bond market 11% stronger, and the JSE’s main index up more than 10%. This helps business confidence, and it makes it easier and cheaper for government to raise debt and for companies to raise funding for new investment.

"While it is too early to see this in figures for investment by companies into new capacity, it should help momentum that should translate into growth."

There are concerns about the sustainability of the GNU, given the unstable coalitions experienced and that continue to be experienced at local government level, she notes.

"It would be highly damaging were the GNU to fall apart, reversing the tentative confidence that has begun to take hold. However, so far, when tensions have arisen they have been dealt with maturely in a way that puts the country first," Mavuso says.

The rapid improvements in the performance of the Department of Home Affairs is positive from a business perspective. Visa backlogs have directly constrained business growth by making it extremely frustrating for companies to bring in the skills they need to operate.

The visa backlog under Home Affairs Minister Leon Schreiber has been reduced by 30%, although there is a long way to go to resolve it. However, there are signs that there has been an improvement, including with the pioneering trusted employer scheme that is making it easier for companies to access the skills they need, she adds.