There is broad consensus that SA needs structural reforms to create a better business environment if it is to attract investment.
- Operation Vulindlela was set up to unlock economic reforms.
- Of the 26 reforms, eight are complete and 11 are underway.
- But there are concerns about five others and two have gone completely astray.
Operation Vulindlela – the joint implementation unit of the Presidency and the National Treasury – which seeks to lead structural economic reforms, says that of the 26 reforms it monitors, eight have been completed and 11 are on track.
The unit was established in October 2020 to unlock the obstacles to microeconomic reforms that government departments and agencies need to implement. There is broad consensus that SA needs structural reforms to create a better business environment if it is to attract investment.
Speaking at a panel discussion Thursday – hosted by UNU-Wider – Nomvuyo Guma, the Treasury’s chief director of microeconomics, said there were concerns about “implementation challenges” on five other reforms and two more that were off track and had failed. terms of delivery.
UNU-Wider runs a research program in SA called SA-Tied, which produces research to inform evidence-based politics.
Among the eight reforms completed are the raising of the licensing threshold for distributed or own production of electricity by companies and mines to 100 MW and the broadband spectrum rod, which ultimately happened last month after several years of delay. The two that fared the worst are Eskom’s goal of achieving 70% Energy Availability Factor (EAF) and emergency supply of next-generation power by the Department of Mineral Resources and Energy.
Eskom’s energy availability factor – the number of plants in good working order and available for dispatching electricity – stands at around 62%, with the outlook for the year indicating that this is likely to decrease further rather than increase. Emergency energy supply – known as the Independent Energy Producers Procurement Program for Risk Mitigation (RMIPPPP) – first introduced in 2019 and released to market in August 2020 ran aground without any of the bidders of success has yet to reach financial closure and one that faces an ongoing litigation.
The head of the Presidency’s Project Management Unit, Rudi Dicks, said Operation Vulindlela was not an attempt to take over the functions of a department but “to design an intervention to support implementation”. Although many government ministers were initially reluctant to accept the intervention, they were now positively supporting the reform.
“We are not trying to fly into departments, but to build an intervention as part of a government process.”
Delivery units are common to outcome-focused government administrations, many of which are based on James Barber’s work in Tony Blair’s British administration from 1997 to 2007. When Western Cape Premier Helen Zille set up a unit of highly effective delivery on the UK model. Guma said that although delivery units were not uncommon, SA had its own specific problems to solve.
“[Operation Vulindlela] was intended to resolve failures – such as a lack of technical capacity as some reforms are difficult to implement and a lack of coordination – because when there are two departments involved that simply disagree on the way forward, there is inertia policy. In the SA context, there is also a vested interest challenge that further complicates the political space and deep political disagreements over some of these structural reforms, ”Guma said.
These were not things that could easily be solved by a government department, which is why Operation Vulindlela was set up as a collaboration between the presidency and the finance ministry, he said.
But as the unit discovered, even completed tasks require follow-up. The 100 MW reform, although published in the Official Gazette, is still heavily constrained by bureaucracy, with the National Energy Regulator of SA imposing onerous conditions for registration not dissimilar to full licensing regulations, defeating the goal of raising of the license threshold. Operation Vulindlela has since taken up the challenge of cutting red tape.