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With 2023 coming to a close, Business Leadership South Africa CEO Busiswe Mavuso has looked at the progress South Africa has made during the year and the setbacks.
The good
Despite a record year of load shedding, there has been progress in the electricity crisis, with Nersa receiving registrations of 4.1GW of new generation through roughly R111 billion investment.
That capacity is gradually coming on stream, whilst around 4GW of small-scale generation has also been added, as businesses and households have taken advantage of the solar tax incentives and the dropping cost of solar.
Although the latest GDP figures for Q3 2023 recorded a slight contraction, the economy has proven incredibly resilient to load shedding with yearly GDP growth recorded.
“It has not all been positive – a clear problem is constant delays in the Renewable Energy Independent Power Producers Programme, which has gone from the envy of the world in effective power procurement to barely managing to procure any new electricity this year,” Mavuso said.
“Some are declaring the end of the programme, but its role in acquiring new utility-scale electricity production remains important.”
“Add to that two other fronts where we need to continue making progress: the unbundling and establishment of an independent system operator out of Eskom, and the publishing of an updated Integrated Resource Plan that sets out a rational least cost vision for energy development in the country for the future.”
That said, Mavuso has welcomed the appointment of new Eskom CEO Dan Marokane, who she hopes will help accelerate the creation of the grid operator and improve the overall performance of the entity.
“I congratulate Mr Marokane on his appointment and look forward to working with him. “Business and Eskom have established a good working relationship that has allowed us to, for example, fast-track the return to service of Kusile units 1 and 3.”
The bad
However, the logistics crisis has now become the next major challenge for the economy, with South Africa’s ports facing a major backlog currently, reducing the amount of materials we can export.
“There are many reasons, from theft and vandalism to poor maintenance, but the impact is now clear in our economic growth numbers, which are showing falling sales and production of commodities and other goods because of the crisis,” she said.
She is hopeful that the National Logistics Crisis Committee can learn from the successes in the electricity sector and help get greater private sector participation in logistics.
In addition, the health sector is getting worse without the prospect of recovery following the passing of the National Health Insurance Bill by the National Council of Provinces, with Mavuso, like many health industry professionals, saying that the Bill is unworkable.
“It will never be implemented. Yet the pretence of trying to make it work is doing serious damage. It has created uncertainty for the health sector, leading to delays in investing. Medical professionals, who can work anywhere in the world, face yet another reason to exit,” she said.
“There is serious damage being done to both the private and public health systems as a result as the government attempts to set up a single-payer fund to acquire all significant health services in the country, effectively destroying the private health system in the process, without any plan on how capacity will be created in the public health service.”
With the Bill now before President Cyril Ramaphosa for assent, she said that there is still an opportunity to change course with the private and public sectors working together – much like they did during the Covid-19 pandemic.
Read: The one thing that could hold the SARB back from cutting interest rates in South Africa
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