OPERATION VULINDLELA TO UNLOCK STRUCTURAL REFORMS FOR ECONOMIC RECOVERY
• AFRICAN BUZZ
OPERATION VULINDLELA TO UNLOCK STRUCTURAL REFORMS FOR ECONOMIC RECOVERY
By the Minerals Council South Africa
South Africa ’ s Presidency releases a quarterly report into its Operation Vulindlela initiative with the National Treasury , which is designed to unlock structural reforms and encourage an economic recovery .
Operation Vulindlela , which goes by its acronym OV , was set up by President Cyril Ramaphosa in 2020 to remove the blockages to electricity generation , water reticulation , transport logistics and digital communications . As time has gone on , it has expanded into other areas .
The quarterly reports give handy snapshots of the efforts to untangle the bureaucratic red tape , slash it and to give the economy a fighting chance for growth – which for South Africa is an existential threat . The expanded definition of unemployment shows that four out of ten adults are out of work . The very high levels of unemployment among youngsters bodes ill for the future as the country battles with high levels of crime and poverty .
Addressing structural reforms to encourage investment is , if possible , more than urgent because it is vital to the fabric of society and the improvement of the lives of 60 million people . These reforms in OV transcend the ideological posturing of the state , which have if anything , discouraged investment and stalled the economy .
Coupled with OV is the initiative of the private sector , as represented by Business for South Africa , and the Presidency , to rapidly address the economic constraints caused by deteriorating transport logistics on rail , road and at the ports , energy shortfalls caused by years of underinvestment and endemic corruption at Eskom , and South Africa ’ s high levels of crime and corruption .
At the very heart of this work is partnerships , trust and cooperation . Neither side can do what is urgently needed to be done on its own because the problems are simply too big , too complicated and too expensive to resolve unilaterally .
In each of these three fields of work , the mining industry is ably represented by no-nonsense , clear-thinking , strategic people who have the best interests of not only the resources sector , but the country as a while , in mind . They are joined by equally talented businesspeople in other key industries .
Much of the behind-the-scenes work in these three areas is confidential , but the public pronouncements made by Business Unity South Africa – the pinnacle business grouping that counts the Minerals Council South Africa as one of its members – combined with the OV quarterly reports , gives a welcome flicker of hope that the economy will be stabilised and returned to growth .
There is progress .
Progress in power The feedback from BUSA indicates that the private sector is treated as a respected partner with legitimate inputs on the trajectory of the economy , with reforms coming thick and fast in the energy sector – most notably the lifting of caps on the sizes of embedded energy projects , and the process of unbundling Eskom into its three constituent parts with the most important being the transmission segment .
While the creation of the transmission company is perhaps a little slower than the market would like , the creation of a separate transmission business will enable a competitive supply of electricity to the grid . It will further open opportunities for investment in expanding the power lines network and fostering competition among electricity producers .
Rail requirements This is what is needed in rail : urgent public sector participation in the operation of trains on the state-owned rail network , with assistance in scheduling , signaling and security . The coal industry has spent about R250-million per year over the past few years to improve security on the railway line that serves Richards Bay from the coalfields . There was a noticeable decrease in theft and vandalism .
Interventions by the public sector , in conjunction with Transnet on other corridors where theft was disrupting services , have also shown results .
Transnet securing spares and materials for its idled new locomotives because of the alleged malfeasance in the procurement of those machines from China will be a welcome development , but the problems on the railway lines extend far beyond just those parked engines . The mining industry has examples to draw on from around the world where its peers operate trains .
The headline number for just the mining industry is that if the railways operated at nameplate capacity , about R150-billion more revenue could be generated from mineral sales , pumping billions into the fiscus .
Countering crime and corruption In the crime and corruption intervention , the private sector will provide skills , training and fund facilities like forensics laboratories to give the security cluster the resources to take the fight to the criminals , and to tackle the kingpins of syndicates that are evermore powerful , ruthless and sophisticated .
South Africa must address and halt the rapid descent into a corrupt nation that has stopped working for its people , replacing despondency with hope and belief in a better future . The only way to do this is through tough conversations , confronting reality , addressing the trust deficit between the state and the private sector and working together . It is important and cannot be derailed by personal agendas , dated ideologies or political posturing from either side . The lives of 60 million depend on it .
Pronouncements made by Business Unity South Africa combined with the OV quarterly reports , gives a welcome flicker of hope .
4 • African Mining • October 2023 www . africanmining . co . za