As first published by Business Day on 20 July 2025

A capable state is foundational for economic growth and the realisation of the constitutional promise that underpins our democracy. For business, it is the difference between an environment of opportunity and one of perpetual risk.

Is the concept of a capable state still only a future ideal in South Africa? Or are we making real progress towards meaningful improvements in state delivery? As we mark the passing of the first anniversary of our Government of National Unity (GNU), it is worth reflecting on the distance still to travel towards building a truly capable state.

A capable state delivers efficiently and transparently on its mandate. It provides effective public services, fosters economic growth and upholds the rule of law. Its institutions are robust, its policies are clear, and its public servants are accountable.

It is common cause that South Africa has struggled with state capacity for too long. This has manifested in slow and sub-standard service delivery as well as policy uncertainty, which together have eroded public trust. The GNU, formed after the 2024 elections, was always going to test whether our political system could rise to the challenge of renewal.

Looking back over the past 12 months, the GNU has delivered some early wins that are worth celebrating, with several ministries shifting the dial on progress.  Department of Home Affairs Minister Leon Schreiber, for instance, has cleared the visa backlog that cost the country dearly in lost tourism and skills. Months-long visa processing times have shrunk to weeks, which has opened the door for much-needed talent and investment. At Transnet, private-sector partnerships are finally emerging in port and rail concessions.

Meanwhile, the Minister for Trade, Industry and Competition, Parks Tau, has sparked the necessary debate about the Competition Commission’s role in enabling foreign direct investment (FDI) in South Africa, highlighting the need to find a balance between attracting FDI and ensuring it benefits South Africa.  In another boost to potential FDI flows, Minister of Public Works and Infrastructure Dean Macpherson held a successful symposium in May where he highlighted seven bankable projects.

Electricity and Energy Minister Kgosientsho Ramokgopa, while he still has a mountain to climb, is making some headway on addressing municipality debt to Eskom — the City of Joburg has committed R3.2 billion to Eskom over the next four years. The Minister for Basic Education, Siviwe Gwarube, is making strides in early childhood development (ECD), which is crucial for South Africa’s future, impacting individual wellbeing as well as societal and economic prosperity.

These successes represent a step change in how government operates and how it partners with business. The quarterly business-presidential meetings now demonstrate genuine collaboration, with tangible outcomes that matter for the economy. The GNU has played a crucial role in holding government accountable for building state capacity and, through business-government collaboration, we have seen the green shoots of reform in key areas. Government’s willingness to contract world-class IT suppliers is a sign it is starting to prioritise efficiency over patronage.

However, the GNU’s founding objectives of job creation, economic growth and sustainable development remain aspirational amid a landscape of modest progress. Collaborative frameworks show promise, but execution gaps and coalition instability threaten outcomes.

For South Africa’s economy to achieve the 3% growth government seeks, it is essential we fix the basics to create a more conducive investment environment over time. The high unemployment ratio, particularly among the youth, remains a crisis. South Africa saw job losses in early 2025, despite the second phase of the Government Business Partnership targeting 470 000 new jobs through energy, logistics and anti-crime reforms. Persistent service delivery failures and corruption erode trust in the GNU’s ability to deliver its objectives.

Business is supporting government in certain areas to assist in addressing unfulfilled deliverables. Sprint targets have been introduced, focussed on implementing solutions for economic growth and reform within three months, particularly within the context of the GNU and Operation Vulindlela (OV). Phase 2 of the OV initiative, focussed on local government reform, is a priority, and BLSA is actively involved in supporting several of its workstreams.

Complicating the outlook is the stability of the GNU. It has navigated deep differences on everything from fiscal policy to industrial strategy. But while there is broad alignment on the need for structural reform, particularly in network industries and OV, the lack of robust protocols for managing disagreement has created uncertainty. Indeed, recent tensions have undermined investor confidence.

If we are to build a truly capable state, the GNU must accelerate progress in several areas:

Policy coherence and stability: Investors and citizens need confidence that policies will be transparent and consistent. The latest iteration of the Mineral Resources Development Bill is a case in point: it compounds regulatory uncertainty rather than providing the clarity needed to attract investment, among other legitimate critiques.

Execution at all levels: While national reforms are important, the real test of state capacity is the average citizen’s lived reality at municipalities, schools, clinics and police stations. To turn around failing municipalities and deliver basic services will require a relentless focus and partnership with business.

Skills development and public sector reform: South Africa’s skills pipeline remains a bottleneck. SETA reforms and the push for merit-based appointments in the public service must be accelerated. Our public sector must become capable of attracting and retaining talent and holding underperformance to account.

Despite the successes outlined, there are also grounds for utter dismay. I refer to the recent assassination of Mpho Mafole, the Head of Corporate and Forensic Audits at the City of Ekurhuleni, appointed to lead the city’s anti-corruption efforts just three months before his death. He was tasked with investigating significant financial misconduct within the metro, including a major electricity billing scandal that reportedly cost the city over R2 billion. As part of his work, Mafole had recently submitted a charge sheet implicating several metro employees, some of whom were already suspended for their alleged involvement in the scandal. How successful are we really going to be in attaining a capable state if those who try to do the right thing continue to be under siege?

Business is clear: we want to partner with government to build a capable state. This, however, requires more than sentiment. It needs a predictable policy environment, reduced red tape, and a firm stance against corruption. Business is ready to invest in infrastructure and skills, but we need a government equally committed to reform and delivery.  I remain optimistic, provided our political leaders choose collaboration and political maturity over conflict, and only if we build on the partnerships established between business and government and commit to unwavering execution.

When President Cyril Ramaphosa announced the GNU on 24 June 2024, he addressed the nation with a strong commitment to unity and service. He emphasised the importance of putting the country first, rising above political differences, and honouring the trust of South Africans, saying: “We dare not squander this moment. We dare not squander the goodwill of the South African people. We dare not allow petty squabbles to get in the way of the urgent task of building a better South Africa for all. We must put the country first, and we must work together for the good of all our people.”

This captured the spirit of the GNU and set the tone for collaborative governance, prioritising national interest over party politics. Without this, job creation and growth will remain elusive, and South Africa’s capable state ambitions will falter.

Ends