MARTIN KINGSTON AND NOLITHA FAKUDE: Big business’s collaboration with government shows results
While there is still a long road ahead, the partnership has now achieved sustainable momentum
28 March 2024 - 05:00
byMartin Kingston and Nolitha Fakude
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Despite a challenging economic and sociopolitical backdrop, practical action taken by the government in collaboration with the private sector offers real hope to millions of South Africans.
In 2023, more than 130 CEOs of companies with a combined market capitalisation of more than R11-trillion pledged their support for, and belief in, SA’s potential. This significant private sector support has resulted in more than R170m in funding and the mobilisation of more than 350 private sector experts to support our partners in the public sector. This will ensure that together we unlock opportunities towards economic prosperity and achieving sustainable inclusive economic growth.
As we cautiously chart the country’s economic recovery it is important that we take stock of the strides made by this initiative since its inception and the potential it offers to achieve 3%-5% GDP growth in the medium to long term. If we are able to urgently implement the critical reforms needed and improve the performance of our energy, transport and logistics industries, while reducing the levels of crime and corruption, we believe we can create 2.5-million jobs by 2030.
Strong governance
This is a structured partnership with the government under the leadership of the president, with multiple senior government ministers, officials and business executives involved. The initiative is anchored in strong governance and reporting structures with clear terms of reference, supported by resources that ensure efficient project management and transparent communication, with joint feedback on progress to the president every six to eight weeks.
The initiative is overseen by a joint strategic oversight committee focused on driving impact in three priority focal areas crucial for building confidence, mobilising investment and growing the economy: energy; transport and logistics; and crime and corruption.
The government-led national energy crisis committee (Necom) is focused on ending the severity and frequency of load-shedding by 2024 and driving reform in the sector through implementation of the Energy Action Plan. This depends on improving Eskom’s performance and adding new generation capacity.
Priority focus areas include addressing performance issues in power stations, deploying business resources and expertise, ensuring successful public auctions to bring power sources online (bid window 7, gas-to-power and battery energy storage systems) and fast tracking the promulgation of the Energy Regulation Amendment (ERA) Bill.
The focus of the national logistics crisis committee is firmly on stabilising and improving rail, port and road operations through both regulatory and operational changes. Business supports several of the eight crisis committee workstreams by providing access to and deploying experienced resources and technical skills, and assisting with the implementation of best practices such as action labs and operational excellence centres.
Resources are being committed to address crime and corruption and strengthen law enforcement capabilities through the Joint Initiative to Fight Crime and Corruption (JICC), overseen by a joint strategic operations committee. Key focus areas include empowering the National Prosecuting Authority (NPA) to prosecute crimes effectively, developing an intelligence database to enhance investigative efforts, and securing SA’s removal from the Financial Action Task Force (FATF) greylist during 2025.
Real effects
Although there is still a long road ahead, the partnership is making excellent progress. In the energy focus area, the early return of units at Kusile power station in the final quarter of 2023, new generation capacity from rooftop solar and significant private sector investment are having a positive effect.
Load-shedding from December to February was 61% less than in the matching period in 2023, and there was an 80% reduction in stage 4 shedding and higher. Importantly, we are starting to see a decoupling of load-shedding from Eskom’s energy availability factor. While improving power plant performance is still key, this is an encouraging sign of the growth of the renewable and self-generation market.
Over the past nine months there has been a doubling of the new generation investment pipeline, with 3.5GW of capacity unlocked and requests for proposals to procure 7.6GW of renewable energy, gas-to-power and battery storage.
From a transport and logistics perspective, new permanent executive leadership has been appointed at Transnet, focused on implementing an aggressive recovery plan. And the Freight Logistics Roadmap has been approved by the cabinet, which will facilitate competition and the entry of new market players.
We’ve seen some operational green shoots, with a 45% reduction in vessels anchored outside the Port of Durban and a 36% reduction in the waiting time to anchor for container vessels.
In the past year there has been a 65% reduction in criminal incidents on the Northern Corridor, enabling trains to get critical goods to destination without interruption.
Passing the NPA Amendment Bill will strengthen the independence and investigating capacity of the NPA, and SA’s removal from the FATF greylist should significantly help in fast-tracking economic recovery.
Power of collaboration
SA has a long history of business collaborating with the government and other key stakeholders to address critical socioeconomic challenges. The country’s response to the Covid-19 pandemic is a case in point. Business for SA (B4SA) was established to unite the business community to support the government in navigating unprecedented challenges posed by the global pandemic. The collaboration was instrumental in procuring and administering vaccines and other necessary medical supplies and expediting a return to normality.
We are now finalising our targets for the end of 2024 and aligning on the critical paths to achieve these. They will be communicated transparently with key stakeholders and reported on regularly, to build confidence and enforce accountability.
While there is still a long road ahead we are proud of the partnership we have built, which is showing real progress and has now gained viable and sustainable momentum. We have had immense support from the business community — from independent experts to large companies investing significant time and resources because they believe in the future of this country and in the power of the private sector to work collaboratively both within its own ranks and with the government and other social partners to help drive change.
As we look to the future the message is clear: collaboration is not just a strategy, it is the key to unlocking SA’s full economic potential. As partners we remain focused on the prize of inclusive economic growth. It is achievable if we all remain focused on delivery through harnessing all the resources available to the country.
• Kingston chairs the B4SA steering committee, and Fakude is president of the Minerals Council SA.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
MARTIN KINGSTON AND NOLITHA FAKUDE: Big business’s collaboration with government shows results
While there is still a long road ahead, the partnership has now achieved sustainable momentum
Despite a challenging economic and sociopolitical backdrop, practical action taken by the government in collaboration with the private sector offers real hope to millions of South Africans.
In 2023, more than 130 CEOs of companies with a combined market capitalisation of more than R11-trillion pledged their support for, and belief in, SA’s potential. This significant private sector support has resulted in more than R170m in funding and the mobilisation of more than 350 private sector experts to support our partners in the public sector. This will ensure that together we unlock opportunities towards economic prosperity and achieving sustainable inclusive economic growth.
As we cautiously chart the country’s economic recovery it is important that we take stock of the strides made by this initiative since its inception and the potential it offers to achieve 3%-5% GDP growth in the medium to long term. If we are able to urgently implement the critical reforms needed and improve the performance of our energy, transport and logistics industries, while reducing the levels of crime and corruption, we believe we can create 2.5-million jobs by 2030.
Strong governance
This is a structured partnership with the government under the leadership of the president, with multiple senior government ministers, officials and business executives involved. The initiative is anchored in strong governance and reporting structures with clear terms of reference, supported by resources that ensure efficient project management and transparent communication, with joint feedback on progress to the president every six to eight weeks.
The initiative is overseen by a joint strategic oversight committee focused on driving impact in three priority focal areas crucial for building confidence, mobilising investment and growing the economy: energy; transport and logistics; and crime and corruption.
The government-led national energy crisis committee (Necom) is focused on ending the severity and frequency of load-shedding by 2024 and driving reform in the sector through implementation of the Energy Action Plan. This depends on improving Eskom’s performance and adding new generation capacity.
Priority focus areas include addressing performance issues in power stations, deploying business resources and expertise, ensuring successful public auctions to bring power sources online (bid window 7, gas-to-power and battery energy storage systems) and fast tracking the promulgation of the Energy Regulation Amendment (ERA) Bill.
The focus of the national logistics crisis committee is firmly on stabilising and improving rail, port and road operations through both regulatory and operational changes. Business supports several of the eight crisis committee workstreams by providing access to and deploying experienced resources and technical skills, and assisting with the implementation of best practices such as action labs and operational excellence centres.
Resources are being committed to address crime and corruption and strengthen law enforcement capabilities through the Joint Initiative to Fight Crime and Corruption (JICC), overseen by a joint strategic operations committee. Key focus areas include empowering the National Prosecuting Authority (NPA) to prosecute crimes effectively, developing an intelligence database to enhance investigative efforts, and securing SA’s removal from the Financial Action Task Force (FATF) greylist during 2025.
Real effects
Although there is still a long road ahead, the partnership is making excellent progress. In the energy focus area, the early return of units at Kusile power station in the final quarter of 2023, new generation capacity from rooftop solar and significant private sector investment are having a positive effect.
Load-shedding from December to February was 61% less than in the matching period in 2023, and there was an 80% reduction in stage 4 shedding and higher. Importantly, we are starting to see a decoupling of load-shedding from Eskom’s energy availability factor. While improving power plant performance is still key, this is an encouraging sign of the growth of the renewable and self-generation market.
Over the past nine months there has been a doubling of the new generation investment pipeline, with 3.5GW of capacity unlocked and requests for proposals to procure 7.6GW of renewable energy, gas-to-power and battery storage.
From a transport and logistics perspective, new permanent executive leadership has been appointed at Transnet, focused on implementing an aggressive recovery plan. And the Freight Logistics Roadmap has been approved by the cabinet, which will facilitate competition and the entry of new market players.
We’ve seen some operational green shoots, with a 45% reduction in vessels anchored outside the Port of Durban and a 36% reduction in the waiting time to anchor for container vessels.
In the past year there has been a 65% reduction in criminal incidents on the Northern Corridor, enabling trains to get critical goods to destination without interruption.
Passing the NPA Amendment Bill will strengthen the independence and investigating capacity of the NPA, and SA’s removal from the FATF greylist should significantly help in fast-tracking economic recovery.
Power of collaboration
SA has a long history of business collaborating with the government and other key stakeholders to address critical socioeconomic challenges. The country’s response to the Covid-19 pandemic is a case in point. Business for SA (B4SA) was established to unite the business community to support the government in navigating unprecedented challenges posed by the global pandemic. The collaboration was instrumental in procuring and administering vaccines and other necessary medical supplies and expediting a return to normality.
We are now finalising our targets for the end of 2024 and aligning on the critical paths to achieve these. They will be communicated transparently with key stakeholders and reported on regularly, to build confidence and enforce accountability.
While there is still a long road ahead we are proud of the partnership we have built, which is showing real progress and has now gained viable and sustainable momentum. We have had immense support from the business community — from independent experts to large companies investing significant time and resources because they believe in the future of this country and in the power of the private sector to work collaboratively both within its own ranks and with the government and other social partners to help drive change.
As we look to the future the message is clear: collaboration is not just a strategy, it is the key to unlocking SA’s full economic potential. As partners we remain focused on the prize of inclusive economic growth. It is achievable if we all remain focused on delivery through harnessing all the resources available to the country.
• Kingston chairs the B4SA steering committee, and Fakude is president of the Minerals Council SA.
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