South Africa, B4SA to Focus on Energy, Freight, Regulation Fixes
(Bloomberg) -- The South African government and Business for South Africa — a body that’s helping the state to coordinate efforts to fix the nation’s collapsing infrastructure and governance issues — plan to accelerate reforms over the next year as some work is already yielding results.
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B4SA leaders met with President Cyril Ramaphosa Tuesday and pledged to unlock “key policy, regulatory and funding bottlenecks” in areas such as energy and logistics, and to accelerate efforts to reduce crime and corruption in a bid to revive economic growth, the presidency and business group said in a joint statement.
South Africa’s biggest companies and the government have set up joint panels as part of a drive by businesses to work with the state to resolve issues holding back the economy. Those range from power cuts and the poor performance of the rail network, to increasing crime and an inefficient work-visa application process.
An energy crisis and the demise of rail, ports and other infrastructure — exacerbated by years of poor governance — have hamstrung Africa’s most industrialized economy. Gross domestic product expanded by an average of less than 1% over the past decade — less than needed to cut a 33.5% unemployment rate, one of the world’s highest.
The energy workstream has had the most impact, with power utility Eskom Holdings SOC Ltd. being able to provide power consistently for more than 140 days. Previously, citizens and businesses grappled with almost-daily power cuts that lasted for hours, crimping productivity.
The next step will be to focus on problems regarding transmission of power, reforming the electricity market, growing generation and tackling issues at municipalities, the presidency and B4SA said.
Ports and freight utility Transnet SOC Ltd. “requires substantial interventions to improve performance to meet the needs of its customers and the market demand necessary for sustainable economic growth,” they said.
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Clearing the bottlenecks “could accelerate existing short-term interventions across four areas, including new work opportunities in tourism and global business services, skilling that creates new jobs — particularly in digital skills,” they said.
This could also bring in more private-sector capital to increase affordable debt available for small businesses, and strengthen the so-called SAYouth platform to facilitate access to opportunities for young people, they said.
More than 130 chief executive officers have pledged support for B4SA. They’ve made 260 million rand ($14 million) available and mobilized more than 350 experts in energy, logistics, administration and governance to help address the nation’s issues.
“Continued momentum could mean we are able to achieve 3% to 5% GDP growth by 2030,” said Adrian Gore, the CEO of Discovery Ltd. and co-convenor of B4SA’s business delegation.
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(Updates with comment from Discovery CEO in final paragraph.)
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