Author: Busi Mavuso
Three pieces of good news arrived last week, and they all point in the same direction. GDP growth beat forecasts. The World Bank ranked Durban the most improved port in the world. And Fitch upgraded South Africa’s credit rating for the first time in 20 years. The reform agenda is starting to deliver real results. The Fitch upgrade follows S&P’s upgrade late last year with a positive outlook, and confirmation from Moody’s that it too has a positive outlook. While we are still a few notches from the all-important investment grade level, the momentum is heading in the right direction.…
As the World Cup kicks off this week in North America, I am reminded of our hosting of the event in 2010. The first match will again be South Africa against Mexico – the same fixture that launched the tournament when we hosted. That 2010 World Cup showcased South Africa at its best. But the contrast between then and now reveals how far Johannesburg has since declined. That game was in the magnificent FNB Stadium, easily accessible by metro train from Park Station. The robots worked, streets were in great condition, and the city’s freeway improvement project had just been…
With 8.1-million unemployed, growth is the only path to job creation, and that requires competitive logistics, enabling exporters to succeed globally – making reform acceleration non-negotiable. Statistics reported last week for freight volumes through South Africa’s ports in 2025 show a genuine recovery. Another win last week was the finalisation of 11 private rail operators’ contracts with Transnet Freight Rail Infrastructure to operate various routes on the network. Transport Minister Barbara Creecy and Transnet CEO Michelle Phillips have shown that reform can deliver measurable results when there’s political will, but momentum must accelerate – we’re still years behind where we…
Any aspiration that South Africa has to rebuild its industrial base is disappearing before our eyes. The Department of Trade, Industry, and Competition should take the lead in changing that, if they indeed regard industrialisation as strategic to the growth of the South African economy. If it fails, a generation of South Africans will pay the price. Manufacturing contributes roughly 12% of GDP and supports more than 1.5-million jobs directly, with multiples of that in supply chains. But we are watching this foundation erode. In the last two years alone, Bridgestone and 13 other automotive component manufacturers have shut down…
Government must urgently finalise new energy vehicles policy, refine tariffs and deploy anti-dumping measures to protect vehicle manufacturers. Balancing China as a critical trading partner with protecting domestic jobs requires sophisticated policy, supporting Chinese manufacturers who invest in local production like Chery’s Rosslyn acquisition, whilst deploying anti-dumping measures against subsidised imports that undermine the industrial base. The DTIC’s proposed competition threshold increases will reduce the regulatory burden on thousands of transactions and address investor concerns about unpredictable merger approval processes. The BLSA Reform Tracker quarterly review, to be launched on Thursday, will show strong progress on logistics reforms with port…
South Africa enters 2026 with high commodity prices, reliable electricity, stable finances, and lower interest rates, creating the strongest foundation for growth in over a decade. Progress on three critical priorities will determine whether this momentum translates into sustained 2%+ growth: transforming logistics through rail and port concessioning, fixing local government service delivery, and strengthening criminal justice effectiveness. These priorities are interconnected parts of the investment enabling environment – reliable logistics allows global competitiveness, functional municipalities provide essential infrastructure, and effective criminal justice protects property rights and enforces contracts. The business-government partnership model that ended load shedding must now be…
The global economy thrives on predictability. When that certainty evaporates, businesses have to adapt or perish. South Africa is aiming to do two things: restore some level of predictability by engaging with the United States, but simultaneously securing international partnerships and building the infrastructure foundation that enables South Africa to be competitive in global trade. President Cyril Ramaphosa made this case powerfully last week at the United Nations General Assembly. Speaking at a South Africa-USA trade and investment dialogue, he outlined clear goals for our US relationship: sustain and expand trade flows, keep our companies competitive, and ensure workers and…
Last week began with promise for small business reform and ended in policy chaos. It felt like good progress was being made on two fronts – easing the labour law burden on small companies and enabling lending to small businesses. But by the end of the week, the second of those had shockingly been withdrawn despite its obvious benefit to a large part of the economy. Positive reforms are essential to turning around our poor economic growth and tackling our unemployment crisis. Through Nedlac and initiatives like Business For South Africa, we work extensively to help develop proposed policy changes…
South Africa can leverage its G20 hosting role by implementing B20 recommendations domestically, turning global policy insights into immediate economic interventions. The looming loss of 250,000 jobs across supply chains, compounded by US trade pressures, demands urgent government action in areas within our control. Key reforms include using special economic zones to stimulate manufacturing, streamlining regulations, expanding digital infrastructure and creating industry-led skills partnerships with private sector participation. Maintaining the status quo while jobs disappear is the riskiest option – we need decisive implementation of incremental changes rather than endless planning cycles. Last week’s handover of the recommendations of the…
The decision by S&P Global to downgrade Transnet’s credit rating was disappointing news for those of us in business eager to see the utility performing better. This downgrade is not just a reflection of Transnet’s financial distress – it is a damning indictment of years of failed leadership, union militancy and a government that continues to bail out state-owned enterprises without demanding fundamental reform. S&P believes that Transnet is burning cash without the prospect of turning around its operating performance and that Transnet Freight Rail will fail to reach its volume targets. The business has high fixed costs, major capital…
One of the positive features of the government of national unity has been the openness of ministers to engage with business. A better understanding of each other’s needs and objectives can help all of us make progress. Last week we were privileged to host the Minister of Electricity and Energy Dr. Kgosientsho Ramokgopa to address our members on the progress of electricity systems reform. Later this month we will host the Minister of Trade, Industry and Competition Parks Tau, and his colleague, the Minister of International Relations and Cooperation, Ronald Lamola. These ministries, among others, play an important role in…
We had a very positive meeting last week with the president and a senior government team to provide updates and discuss the agenda for our government/business partnership in 2025 that is delivered through Business for South Africa. The ambition of phase 2 of the partnership is to deliver economic growth of 3% by the end of this year – that is a material ambition, but one that both business and government are committed to seeing through. That level of growth leads to job creation and triggers a positive self-reinforcing sentiment that supports growth. But we must act rapidly if we…
It is going to be an interesting year globally, but one that I believe will be positive for South Africa. We have an opportunity to consolidate the reforms made in the past several years. Load-shedding is behind us and other key structural impediments to our economy like the logistics crisis are being addressed. There certainly is still much work to do on reforms to support our economy, but we should start to see the fruits of the work done. Through the hosting of the G20 this year, and the B20-associated business event, South Africa will be on show to the…
I have written before about how we face a “gas cliff” when the supply of gas to industrial users ceases in 2026. This is a crisis for businesses that collectively employ 70,000 people and generate R500bn a year for the economy. It is a crisis that can only be avoided with a coordinated and rapid plan between business and government. So, you might have thought that last week’s draft Gas Master Plan, gazetted by the Department of Mineral Resources and Energy, would clearly address the looming crisis and table a credible strategy to avoid it. But, while it contains many laudable principles…
The withdrawal last week of proposed new visa regulations that would have eased the way for skilled workers to come to South Africa was an inadvertent illustration of how little public consultations matter in many parts of government. The regulations were withdrawn because the minister of home affairs had inadvertently published them a day before the period was meant to close for public comment on the drafts. This might seem like merely an administrative error, but I think it reveals how little attention policy makers pay to public comment. Clearly, from the minister down, the public commentary simply did not…
The annual Edelman Trust Barometer last week provided some interesting insights into the public’s view of business and government. What stood out in the South African results was the relatively high trust in business compared to government. The gap between the two is the largest in the world. Business has a trust rating of 62 (out of 100) while government is rated at 29. It was also striking that 61% of South Africans believe partnerships between business and government can lead to more trustworthy management of technology-led changes. This perception has rocketed in the last ten years, among the highest…
The water crisis appears to be growing, although it is difficult to get a grip on the extent of delivery failure across the country. That is because water services are a local government responsibility and the degree to which municipalities are meeting their constitutional duty to provide water varies widely. Among the 257 municipalities there are no doubt examples of success and failure, but it is hard to get a consolidated picture of how well they are doing, at least in the short term. But the anecdotes of failing water infrastructure reported in the media are too frequent – from…
We are facing a new blow to energy availability in our economy, with a cliff in natural gas supply just over two years away. Many industries rely on gas as an energy source, from glass making to beverages. The current main source of supply, two gas fields in Mozambique operated by Sasol, will not supply South African clients from mid-2026 since Sasol will fully utilise the remaining gas itself. As with electricity, there have been warnings for some time that this was coming. But through a combination of policy inaction and an inability to commit to the large-scale investment needed…
It is depressing reading of retrenchments taking place in the resources sector as commodity prices slide, but also because mining companies are unable to get output to their markets. Stockpiles have been building up because of problems with the rail and port services that Transnet provides, but they can’t grow any more. The only option is to reduce production, which means there is excess workforce. The logistics crisis is a very serious challenge for the economy, and that is why business and government have pulled together with unprecedented speed to work on solutions. Through Business for South Africa, we have…
The mining sector is facing unprecedented challenges. The rapid deterioration of Transnet’s ability to move output across the country and through the ports has meant a considerable decline in earnings. Richards Bay coal exports last year were at a 30-year low thanks to falling rail volumes, with Transnet delivering 48-million tonnes against a contracted volume of 60-million. Volumes of iron ore have also been falling dramatically with Transnet exporting 51-million tonnes against a target of 60-million, also a historic low. National Treasury estimates the economic cost of rail inefficiency last year was about 5.5% of GDP. This has hit the…
The World Economic Forum last week focused attention on the risks facing the global economy. Extreme weather events driven by climate change and risks related to artificial intelligence all featured strongly. More immediately, the wars between Ukraine and Russia, and Israel and Hamas were top of mind, as well as the wave of elections this year as more than half the world’s population go to the polls. The global lodestar is a lack of certainty. I always find the event, which several BLSA board members attended, a reality check on how the issues that preoccupy us South Africans are overshadowed…
As we conclude 2023, I am struck by both the progress and the setbacks that we have faced in our efforts as organised business to help put South Africa on track to deliver the economic growth we desperately need. A highlight has been the new partnership established between organised business, represented by Business for South Africa, and the government, represented by the Presidency. This has established three workstreams to deal with the energy crisis, logistics crisis, and crime and corruption. Certain initiatives within those streams are now making good progress. I think the clearest win is that the electricity crisis…
The National Health Insurance charade continues despite its absurdity. I can assure you that it will end up in no improvements to healthcare quality in South Africa, in fact, the risk is precisely the opposite. As I have written in a previous letter, if government is serious about delivering an improvement in healthcare, there are far better ways to do it, involving partnerships with the private sector that have been demonstrated to work. Instead, we continue with this make-believe in which the apparent upsides of the NHI – access to quality health care for all – can be talked about without…
Any reduction in load-shedding is welcome but we must not let it lull us into complacency. Our electricity system remains unable to deliver for our economy. As we go deeper into winter the pressure on it will increase and load-shedding is very likely to reach record levels. But I am pleased with the urgency and focus that both government and business are putting into dealing with the electricity crisis. We have an effective working relationship already in place based on the Energy Action Plan, which is being spearheaded by the National Energy Crisis Committee (Necom), with which business is very…
Last week an important new vehicle for business cooperation with the government began its journey, writes BLSA CEO Busi Mavuso. At a meeting at the Union Buildings, organised business, together with several CEOs of major South African businesses, met with the president and several of his ministers to discuss an urgent plan to address the most pressing priorities we face as a country. We focused on three areas: energy, logistics, and crime. Each workstream now has had two CEOs appointed to drive the business contribution to the partnership. These are CEOs with a great deal of experience and insight into the effects…