Government is expected to launch the next phase of Operation Vulindlela, which is aimed at accelerating the implementation of structural reforms.
This is according to the Medium-Term Budget Policy Statement (MTBPS) released by National Treasury on Wednesday.
Treasury explained that the country’s economic growth prospects are closely tied to Operation Vulindlela and structural reforms to ‘improve competitiveness and productivity and boost investment’.
‘In its first phase, this initiative implemented 35 reform actions in five network industries, including reducing power cuts, improving the performance of the logistics system, lowering data costs, improving water supply and enabling the country to attract critical skills.
‘The next phase of reforms will support higher medium-term growth, which is required to significantly expand employment. New initiatives aim to reverse local government decline, tackle spatial inequality and advance digital government to improve large-scale service delivery,’ National Trea
sury said.
Operation Vulindlela is a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms and support economic recovery.
Government has set its focus on Eskom’s restructuring as a priority and to establish a bustling energy market, with adequate supply for a growing economy.
‘The cumulative effects of reforms include improved power station performance and no ‘load shedding’ since 26 March 2024. The Electricity Regulation Amendment Bill was signed into law in August of this year.
‘This, together with the creation of the National Transmission Company of South Africa, which began operating on 1 July 2024, is establishing rules and procedures for a competitive electricity market.
‘The ongoing Energy Action Plan has boosted efforts to restore energy availability and procure new generation. By end-August 2024, project registrations with South Africa’s energy regulator exceeded 8500 megawatts,’ the MTBPS stated.
The critical sector of freight rail lo
gistics is also receiving attention.
‘Transport reforms that open the freight rail network to private operators will reduce inefficiencies and costs, helping firms offer lower prices and boosting economic growth. To this end, the Economic Regulation of Transport Bill – enabling private-sector use of the rail network – was signed into law in June 2024.
‘Transnet freight volumes grew from 149.5 million tonnes at the end of the previous financial year to approximately 151.7 million tonnes by end-March 2024, supported by the implementation of a recovery plan from October 2023 and reversing a years-long decline. Port cargo handled has stabilised relative to 2023 levels,’ National Treasury stated.
Treasury emphasised that reforms in the water sector are critical for economic growth and water security.
‘The National Water Resources Infrastructure Agency Bill, signed on 27 August 2024, creates an independent agency to oversee bulk water resources. The Water Services Amendment Bill, allowing for intervention in f
ailing municipalities, has received public comment and will soon be submitted to Cabinet for approval,’ Treasury said.
Reforms in that sector target supply and infrastructure challenges.
‘Water sector reforms being prioritised by Operation Vulindlela include independent regulation, strengthening local water services by licensing water service providers, legal proceedings on non-compliance by municipalities and trading services reforms.
‘Trading services reforms refer to governance, institutional, management and financial reforms to improve essential services, enabled by a new performance-based grant. The National Treasury is also working closely with the Water Partnerships Office to identify opportunities for private sector participation, such as non-revenue water projects. Non-revenue water refers to the revenue lost from leaking water infrastructure.
Elsewhere, the visa system has been reformed by the Department of Home Affairs to attract skills and boost tourism while the rollout of 5G infrastructure
has tapered data costs, expanded connectivity and improved access to network services.
Source: South African Government News Agency