With the 2024 elections behind us and discussions between political parties around the formation of a government ongoing, there is broad support for the continuation of economic reforms.
At this important moment in the life of our nation, eradicating poverty and inequality and reducing unemployment must remain our overriding collective priorities. We cannot address these challenges and improve the lives of our people without attracting more investment in our economy and accelerating growth.
Economic growth, transformation and job creation has been at the centre of the programme of the Sixth Administration. Since 2019, we have implemented a range of growth-enhancing structural reforms to remove the constraints which have held back growth, to attract higher levels of investment, and to make our economy more efficient and competitive.
In 2020 we established Operation Vulindlela, a government-wide initiative to accelerate the implementation of these reforms and support economic recovery.
Because well-functioning network industries are vital to economic growth, we have undertaken far-reaching reforms in energy, logistics, the water sector and telecommunications.
These reforms include an overhaul of the energy sector to enable efficiency, stability and greater investment in electricity generation and to introduce a more competitive electricity market. We have introduced private sector participation in the operation of port terminals, enabled open access to the freight rail network and completed the auction of high-demand broadband spectrum. While we recognise the value of public-private partnerships, we have stressed that the state must continue to play a strategic role in the development and ownership of public infrastructure in the interest of the people.
To attract critical skills needed to boost the economy and to grow the tourism sector, we have also implemented reforms to overhaul the visa regime.
The progressive implementation of these structural reforms has helped to improve investor confidence. This has in turn enabled us, despite an extended period of load shedding, to attract investment into the economy across a range of industries.
The structural reform process has produced tangible results and laid the groundwork for sustainable growth into the future.
Regardless of the form or composition of the incoming administration, it is important that the momentum of reform be retained and sustained. While we have come a long way in the reform journey, there is much work that still needs to be done to reignite growth in our economy. A change in direction would derail the positive progress that has been made and take us back to the starting blocks.
This sentiment was echoed in a recent study by the Bureau for Economic Research (BER), an independent research institute, on South Africa’s economic trajectory following the recent general elections. Pointing to existing structural reforms, the BER commented that there is no need ‘to reinvent the wheel’, and that sustained implementation of the existing reforms had far greater currency than ‘miracles or fairy tales for a better outcome.’
We have said that it will take time for the impact of many of these reforms to be fully felt. At the same time, the process of recovery and rebuilding is well underway.
The electricity sector is one such example. The implementation of the Energy Action Plan that we announced in 2022 has seen accelerated procurement of new generation capacity, a growing number of new energy projects being connected to the grid, and a surge in rooftop solar energy. These developments, together with Eskom’s ongoing work to improve the maintenance of its power stations, have helped to reduce the severity of load-shedding.
These reforms must continue alongside measures to advance economic inclusion, such as skills development, addressing spatial inequality and investing in skills development and public employment programmes.
To realise higher economic growth and create more jobs, we need a combination of structural reforms, increased investment and sound macroeconomic management. As the Minister of Finance noted in this year’s Budget Speech, successful efforts to improve the fiscal position, complete structural reforms and bolster the capacity of the state will in combination reduce borrowing costs, raise confidence, increase investment and employment, and accelerate economic growth.
Modelling by the National Treasury showed that the successful implementation of key reforms could raise GDP growth to over 3% a year, add an additional R600 billion to revenue and create a substantial number of additional jobs over ten years.
This approach is supported by the BER study, which shows that continuing the path of reform could increase growth. This would start to make a meaningful dent in our unemployment rate and usher in a new era of growing prosperity for all.
By deepening our partnership as government, business and labour, by accelerating structural reform, by continuing the work to strengthen state capacity and improve the operation of state-owned enterprises, we are firmly on course for realising greater economic growth and creating more jobs.
As the country prepares for a new democratic administration, all parties need to work together to sustain the momentum of reform, growth and transformation. A stable and effective government committed to economic reform will enable us to build an inclusive and growing economy that benefits all South Africans.
Cyril Ramaphosa is the President of the Republic of South Africa and the head of the African National Congress (ANC). The article reflects the author’s opinions and not necessarily those of The Southern African Times.
