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Picture: 123RF
Picture: 123RF

Having passed the 100 day anniversary of the formation of the government of national unity (GNU) of this seventh administration — which prioritises economic reform in its statement of intent and minimum programme of action — the presidency, as the apex department of government and custodian of the National Development Plan, remains committed to leading the path of reform by reviving our economy to create jobs and economic growth through the effective implementation of the Economic Reconstruction and Recovery Plan (ERRP).    

The ERRP was launched by President Cyril Ramaphosa in October 2020 and places Operation Vulindlela (OV) at the centre of our economic reconstruction and recovery following the post Covid-19 pandemic economic decline. OV is a joint initiative of the presidency and the Treasury to drive economic reform, reporting directly to the president on a regular basis.

OV looked at a set of five priorities based on their impact on growth and job creation, targeting the binding constraints on growth. These were to stabilise the supply of electricity; create a competitive and efficient freight logistics system; reduce the cost and improve the quality of digital communication; ensure a stable, quality supply of water; and reform the visa regime to facilitate skilled immigration and support tourism.

The first phase of Operation Vulindlela, which concluded at the end of the sixth Administration, saw 94% of reforms completed or progressing well, over R500bn in new investment unlocked, a pipeline of 22,500MW of private sector renewable energy projects, a reduction in the cost of data by up to 51%, and the time it takes to obtain a water use licence dropping from 300 to 90 days.

One of the key interventions driven by Operation Vulindlela is the reform of the visa system. The ERRP noted that the growth of many economic sectors is constrained by an insufficient supply of skills. SA’s labour market is characterised by an acute demand for skilled labour that exists alongside high levels of unemployment among the low skilled and unskilled.

A large and growing body of literature shows that skilled immigration is an important driver of economic growth, and that highly skilled workers create jobs by starting or growing businesses, enhancing productivity and innovation and improving the competitiveness of the firms they work for.

Reform in this area includes the introduction of an eVisa system that is now available in 34 countries, and the revision of the immigration regulations to establish a more flexible points-based system for skilled work visas.

The collaboration between various stakeholders through the National Logistics Crisis Committee (NLCC) has already seen a recovery of 10-million tonnes (Mt) on the rail network against the pre-recovery trend. Interventions at key port terminals have seen a 73% reduction in vessels at anchorage since November 2023, with the upgrading of equipment and operational improvements.

In addition, security incidents on the Northern Corridor have reduced by over 60% through close collaboration between Transnet, law enforcement agencies and the private sector. 

More recent reforms in the logistics system include opening the freight rail system to competition and introducing private sector participation in container terminals, with the selection by Transnet of an equity partner for the Durban Container Terminal (DCT) Pier 2. 

Modelling of the ERRP by the the Treasury showed that the successful implementation of key reforms could raise GDP growth to more than 3% per year, add R600bn to revenue and create more than 1-million jobs over 10 years.

These projections have recently been confirmed through independent modelling by the Bureau for Economic Research (BER), which suggests that Operation Vulindlela is heading in the right direction.

To place this in context, SA has not experienced such significant growth in over a decade, having last recorded 2.5% growth in 2013.

The work done through Operation Vulindlela gives us hope that a new era of more rapid and inclusive growth is ahead of us, and that we can return again to the kind of growth that we last enjoyed in the mid-2000s. 

The nature of complex economic reforms is that it takes time for their full impact to be realised. We are now seeing the positive effects of many of the reforms we initiated four years ago, which are providing a strong tailwind for economic growth.

As the momentum of reform continues to build, these supportive winds will grow and propel our economy forward. 

• Mhlauli is deputy minister in the presidency, responsible for Stats SA and other agencies.

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