Business Leadership South Africa (BLSA) chief executive Busi Mavuso warned last week that, even as the government pushes ahead with major reforms, confidence among South African firms has slipped further. The Reuters-based RMB/BER confidence index, a monthly survey that asks senior executives whether they expect the economy to improve, fell one point to 38 in the third quarter, a reading that signals overall negative sentiment. Sixty-two percent of respondents said they were dissatisfied with current business conditions.
That drop follows a flurry of announcements that, on paper, should improve the operating environment. The National Treasury, acting through the Development Bank of Southern Africa, released a request for proposals (RFP) for advisors to help unbundle Eskom’s transmission assets into an independent transmission system operator (ITSO). Unbundling means separating the high-voltage power grid from Eskom’s generation and retail businesses, creating a stand-alone entity that can operate the grid on a commercial basis. The Treasury’s timetable is tight, the whole transaction must be wrapped up within the next 18 months and will need the consent of Eskom’s lenders.
Mavuso said she had met with Eskom chairman Mteto Nyati and group chief executive Dan Marokane, and that both Eskom and BLSA issued a joint statement supporting the electricity reform programme. She added that Eskom’s lenders appear willing to work on solutions, and that the Treasury’s advisors will be crucial in aligning the many parties involved.
Logistics reforms move forward, but delays linger
At the same time, the Department of Transport is finalising a rail network statement that will dictate how private operators can access the national rail system. The statement, which is expected by the end of September, is intended to unlock billions of rand in new investment in rolling stock and rail infrastructure. While the deadline has slipped, Mavuso argued that a high-quality document is preferable to a rushed, ineffective one.
Both electricity and logistics are described by the BLSA chief as “growth enablers”. Reliable power and efficient freight services are pre-conditions for the investment needed to push the economy toward the 3 %-plus growth target the government has set.
On the trade front, two developments were highlighted. An MoU was signed between the India Commonwealth Trade Council and the India South Africa Chamber of Commerce, a move Mavuso hopes will deepen bilateral trade. She also noted the two-year extension of the African Growth and Opportunity Act (AGOA), which gives South African exporters preferential access to the United States market. While the extension is welcome, she cautioned that its short-term nature limits its ability to drive significant new investment.
What does this mean for small and medium-sized enterprises? The confidence index is a leading indicator of spending and hiring plans. A reading of 38 suggests many owners are still hesitant to expand, hire, or invest in new equipment. The reforms, if they deliver lower electricity tariffs and more reliable rail services, could eventually improve input costs and supply chain reliability, factors that directly affect SME profitability. However, until the unbundling of Eskom’s transmission network is completed and private rail operators can compete on service quality and price, the benefits remain speculative.
In Mavuso’s view, the gap between reform announcements and on-the-ground impact is the core issue. “We must not slow down before we get there,” she said, urging policymakers to keep momentum while ensuring the technical and financial details are ironed out.
For now, the data suggest that optimism has not yet caught up with policy action. SMEs watching the electricity and logistics reforms will need to monitor the 18-month unbundling timeline and the rail network statement’s release to gauge when, if ever, the promised cost reductions and service improvements will materialise.
