South Africa needs structural reform to prevent the country from being strangled by state inefficiency, said Busisiwe Mavuso, the outspoken CEO of Business Leadership South Africa (BLSA) at the Atlas AgriSA Congress in Pretoria.
By Carien Kruger, senior journalist at African Farming and Landbouweekblad
“If we do not want to be strangled by thieves masquerading as government officials, reforms are critical – because through reform we reduce the economy’s exposure to political risk,” Mavuso said to applause.
According to her, South Africa’s economic difficulties stem from electing the wrong leaders into positions of power. “The kind of leadership we saw during the Zuma years must never again be allowed to harm the economy on the same scale,” she said.
In 2007, South Africa’s unemployment rate stood at 27%, lower than it is today, and the economy grew at about 6%, compared with the current sluggish growth rate, Mavuso pointed out.
“We need to reduce the economy’s exposure to politics so that whatever happens in government does not cripple the economy. Politics and economics are two sides of the same coin – if politics fails, the economy fails.”
She noted that South Africa has 743 state-owned enterprises, all of which are dependent on government for some form of bail-out. “All are dysfunctional. Eskom and Transnet are part of this problem.”
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Private Sector Brings Hope
The real impact of reforms is that they deliberately reverse South Africa’s monopolistic market structure and reduce state dominance in key industries by opening them to private sector participation, Mavuso said. This marks a fundamental shift.
She highlighted that private enterprises can now generate their own electricity. If Eskom were to collapse today, the damage would not be as severe as in 2023, when load-shedding plunged the country into darkness for 283 days.
“How can you run a business under those conditions?” she asked. “Eskom has been made ineffective by politics, because someone decided, if we are going to steal money, we’ll steal it from Eskom.” The same problem affects Transnet, she added, because these entities have big budgets.
By appointing unethical boards and CEOs, procurement prices can be inflated, allowing money to flow back through “brown envelopes”.
Transnet’s decline, she noted, is hurting imports and exports – including agriculture. At Durban Harbour, trucks often queue for 2 km, waiting up to five days to unload. At night, drivers have to take turns to sleep because of diesel thieves – or a diesel mafia – who drain fuel from their trucks. As a result, many companies now export their goods through Mozambique or Namibia instead.
“We can’t have an economy that works like that,” she warned.
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Progress on Reforms
The private sector will soon be allowed to use South Africa’s railway lines for their own locomotives, Mavuso said. “If Transnet collapses, private companies will still be able to move goods to market – and that’s important because it creates competition.”
Other key reforms include improving visa processes and government procurement of IT services.
Investment Requires the Right Environment
South Africa is working to attract more foreign direct investment, but Mavuso said this won’t succeed without key structural changes.
“If you don’t have a favourable trade environment and energy security, you are not going to get investment.”
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