A New Era: Phase 2 launch of the partnership between business and government

A year ago, we were in a different space in South Africa. Loadshedding was a national crisis and there was a pervasive sense of despair and decline. It was within this context that the partnership between business and government was conceived. It focused on three key areas we believed would provide a fulcrum for growth: energy, transport and logistics, and crime and corruption.

The construct of the partnership was unusual. On the business side, it wasn’t just an affiliation between broad entities, but enlisted the support of CEOs specifically, bringing individuals and companies to the fore. We did this through a symbolic Pledge whereby CEOs stated their shared belief in the potential of the country and their commitment to help build it. What stood out for our team was that while individual CEOs had strong opinions and concerns about underlying issues, their commitment to the country was unequivocal, and because of this, it was quick to rally remarkable support and effect change. We swiftly gained buy-in from more than 140 of SA’s top CEOs, representing companies with a combined market cap of over R11 trillion and employing more than 1.36 million people.  

As business, we are proud of what has been achieved, with the signature milestone being that we turned the corner on loadshedding. There has been a 76% reduction in loadshedding since 2023 with 6GW of new energy generation added to the grid. This should be comprehensively dealt with by the end of 2025, thanks to the implementation of the Energy Action Plan, large-scale private sector investment in generation, and the implementation of the Electricity Regulation Amendment Act. In transport and logistics, the private sector helped deploy over 500 security personnel along a key freight rail corridor with more than R700m invested. Recently, the Economic Regulation of Transport Bill was signed, an important step in establishing a competitive transport industry with private sector participation, particularly in rail and ports. In terms of Crime and Corruption, the investments mentioned above led to a 50% reduction in security incidents on the coal line. A financial Forensic Analysis Centre has been set up with an investment of R57 million, and the Joint Initiative on Crime and Corruption (JICC) is in place and operational. Overall, the private sector contributed over 350 experts and thousands of hours of time, in addition to financial contributions, to further the ambitions of the Pledge and partnership. 

The Phase 1 successes yielded profound lessons. Specifically, that in an emerging economy such as ours, the private sector has skills and expertise that can be of immense benefit to the country. A disciplined approach and creating discrete targets and deliverables in each of the three focal areas brought the necessary rigour required to give effect to the conceptual ideals stated in our Pledge. This along with tight governance processes and extensive resource allocation – hundreds of people working full-time on solutions – was essential to maintain an accelerated work rate. The political and personal leadership of the President, as well as buy-in from several Ministers and DGs, enabled the success of phase 1 of the partnership, creating what could be a repeatable model for similar partnerships in other emerging markets. 

A year later, the country is in a very different place, a point of inflection, and potentially a new era if we can capitalise on progress. Yesterday we launched the second phase of the partnership. In addition to our continued bottom-up focus on reforms and operational improvements, we’ve added a top-down approach, focusing on a target of 3% GDP growth by the end of 2025. Intuitively, we know that economic growth drives job creation and in turn shifts narrative. Less intuitive but equally as causal and powerful, however, is that a shift in narrative leads to more growth and investment, creating a virtuous circle. Research from the University of Chicago and others shows that in emerging economies, increased consumer sentiment leads to increased economic growth and total factor productivity. The work we are doing to foster a more positive narrative is beginning to yield results to reflect, in the President’s words, “a new era of great promise”. 

There is a lot at stake. Had our economy grown over the last 15 years at the rate it had previously, it would be 1.4 times larger on a GDP per capita basis. Misfiring again is not an option. The SARB has projected growth of 1.6% for 2025, but we know we need to stretch this much further. We commissioned analysis from the Bureau of Economic Research (BER) which shows that if we achieve rapid operational improvements at Transnet and Eskom and more rapidly implement the necessary reforms, leading to increased exports and investment, we could see GDP growth of 3.3% by the end of 2025. This level of sustained economic growth could generate 1 million additional jobs by 2030. Several activities underpin our 2025 ambition, including: ensuring loadshedding is eradicated and adding >4GW of renewable generation capacity to the grid; unlocking cR28 billion of investment in rail infrastructure and capacity; increasing port and rail volumes; getting SA removed from the Financial Action Task Force (FATF) grey list to boost investor confidence; and reducing bottlenecks to create 400,000 work opportunities for young people by the end of 2026 via scaling existing partnerships and implementing short-term interventions such as reforming the tourist and work visa regimes.

As we enter the next phase, business and government have confidence in the partnership model and believe we can collectively achieve our near-term objectives. We know what needs to be done and can’t risk losing momentum. Our ask of both business and government is to scale up our efforts to accelerate progress and growth – our immediate target is R150 million in catalytic funding towards defined initiatives with measurable deliverables. We must not miss this opportunity to change the trajectory of our country and future.

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