Structural reforms critical for economic growth, says Ramaphosa

President Cyril Ramaphosa says his economic structural reform project is beginning to yield results.

Since the start of his administration, Ramaphosa said the government has been pursuing far-reaching reforms in network industries like electricity, telecommunication, water, ports and rail.

“We have focused on reforms that are sustainable and transformative rather than temporary solutions that won’t last,” he said.

In his weekly newsletter, the president said it was understandable that the severity of the challenges facing the country at this time gave rise to frustration and impatience.

“Given the persistence of load-shedding, for example, few people are able to contemplate the impact of a transformed energy landscape. While we are making progress towards ending load-shedding, transforming the electricity market to make it more competitive and cost-effective is critical to the country’s future,” he said.

Ramaphosa cited the latest report from Operation Vulindlela, a joint project of the Presidency, the National Treasury and key departments, as outlining progress made in the implementation of these reforms.

“Many of these reforms are being brought about by legislative and regulatory changes, which may not inspire many people but which have a substantial impact on people’s lives and the performance of the economy,” he said.

The president hailed several milestones in key areas achieved to date, citing, in energy, the removal of the licensing requirement for generation projects of any size. Because of this, he said, more than 100 projects are now in development, representing more than 10,000MW of new generation capacity and R200bn of private sector investment. 

In freight logistics, Ramaphosa said the country's poor performance was the biggest immediate constraint on growth after the electricity shortfall.

“Progress has been made to address the challenges in ports and rail, such as the establishment of a national logistics crisis committee to improve the performance of ports and rail in the immediate term and drive the implementation of a freight logistics roadmap into the future.”

On reforms in telecommunications, Ramaphosa said the gazetting of a rapid deployment policy and policy direction as well as a standard draft bylaw for wayleave approvals will help to accelerate the rollout of telecommunications infrastructure such as fibre and towers.

In the water sector, he said reforms aim to improve water quality while ensuring security of supply in the long term.

“A water partnerships office has been established to support private sector involvement in areas such as water re-use, improving wastewater treatment, desalination projects and improving rural water services.”

Addressing immigration, the president referred to the department of home affairs' implementation of far-reaching reforms that will make the work visa system more agile and responsive to the realities of the new world of work and attract higher numbers of tourists.

Ramaphosa remained hopeful that the government was committed to staying the course on overall structural reform. “As a 2004 paper from the International Monetary Fund rightly notes, they are hard to sell. The gains from reform are never as clear to the wider public as they are to economists,” he said.

However, he insisted that reforms are critical if South Africa is to achieve the scale of economic growth needed at this difficult time.

“We need consistency and perspective — not temporary, unsustainable solutions — if we are to improve the lives of South Africans, create jobs, attract higher levels of investment and build an economy of the future.”

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