Reflecting on the year that was, the successful formation of a government of national unity and the abatement of load shedding have given us a window of comparative stability that will potentially allow us to make real progress against the critical task of economic recovery and growth.
This hard-won window of opportunity was marked by the launch, in October, of the second phase of the Government-Business Partnership, which we highlight in this edition, and which counts on the support of BLSA and many of our members. This phase aims to build on the progress made over the past several years to deepen reforms, boost investment, and foster positive national sentiment. It is not enough to stop losing ground: we urgently need to catch up, improve our regional and global competitiveness, and lay the foundations for sustained economic growth.
Apart from the direct benefits of a more stable supply of electricity for businesses and households, the cessation of load shedding is driving the maturation of the energy sector. Renewable energy providers are consolidating, the prices of storage and other hardware continue to fall, and businesses are planning for renewable-energy components that help their bottom line in addition to improving their energy security.
Eskom’s proposed tariff increases of 36% in FY 2026, alongside international measures such as the Carbon Border Adjustment Mechanism, will make the business case for the adoption of solar and other renewable energy sources more compelling, even as they place already-strained households and smaller businesses under increased pressure.
In the wake of COP29, held in Baku from 11 to 22 November, progress is steadily being made towards the effective implementation of the Just Energy Transition, which is essential for economic growth, environmental sustainability, and positioning South Africa as a global player in the low-carbon economy transition. This planning is supported by the Climate Change Working Group, work on the Nationally Determined Contributions, National Adaptation Plans, and the Sectoral Emissions Targets Development Framework. The National Energy Crisis Committee business and government partnership has been renewed, with a focus on enabling investment and direct lines of communication between business and government.
Beyond these glimpses of opportunity, tangible progress in several areas remains frustratingly slow, with key regulatory frameworks such as the Draft Integrated Resource Plan 2023, similarly mired in red tape. At the time of writing, a remodelled draft plan had just been released, with the intention of having it approved by Cabinet by 31 March 2025.
After energy, the core infrastructural sectors requiring urgent remediation relate to transport and logistics. BUSA-Transnet’s quarterly engagements continue to focus on resolving operational bottlenecks and improving efficiency across South Africa’s ports and railways.
While we are cautiously optimistic that this period of fragile stability at home might lead to the collaborative approach to sustainable economic growth that South Africa so desperately needs, Africa remains vulnerable to the escalating uncertainty of the international geopolitical arena. It is vital that regional cooperative agreements such as the African Continental Free Trade Area are supported and enabled in order to build resilience of local trade and supply-chain networks.
More than anything else, effective, committed collaboration between business, labour, and government is required to accelerate the implementation of structural reforms. We have a narrow window of opportunity. The future of our country will be in large part determined by our ability, over the next few years, to work alongside one another for the good of our country and our people.
To all our members, BLSA thanks you for your support and commitment to getting South Africa to realise its full potential. We wish you all a safe and peaceful festive season and look forward to a year of fruitful collaboration and engagement.
Sincerely
Busisiwe Mavuso
BLSA partnered with the Operation Vulindlela (OV) team to assist with the general and critical skills visas initiative, aimed at enabling skilled professionals to move to South Africa for work, thereby benefitting the economy.
BLSA’s partnership with OV has resulted in regulatory and legislative amendments being adopted. On 20 May the new Visa Regulations were gazetted, resulting in BLSA’s objectives being achieved through supporting OV’s work. The specific achievements were:
At the time of going to print, approximately 120 firms had obtained Trusted Employer Scheme status, and 34 countries can now apply for e-visas to visit South Africa.
In addition, over 150,000 visas have been cleared from a backlog of just over 300,000 when Minister of Home Affairs, Leon Schreiber, took office.
BLSA has allocated funding towards the Resource Mobilisation Fund, launched in March 2023 to support the National Energy Crisis Committee (NECOM). The funds are ringfenced for specified outcomes.
According to the latest report from Business for South Africa (B4SA) demonstrates the following achievements:
BLSA is currently supporting various workstreams to implement the Freight Logistics Roadmap, to ultimately foster greater private sector involvement in rail and logistics. BLSA’s support concentrates on assisting with the establishment of the Transport Economic Regulator, and the National Ports Authority, supporting the Draft Transnet Rail Network Statement, and assisting with the Draft National Rail Bill.
The latest report from Business for South Africa (B4SA) demonstrates the following achievements:
BLSA’s support to the Presidential Red Tape Reduction Team has resulted in the cutting of red tape to enhance the business environment and create much-needed jobs in South Africa. To date the work undertaken focused on the following:
BLSA contracted technical experts to assist the Department of Water and Sanitation (DWS) in unblocking various delayed critical water and sanitation infrastructure projects. BLSA is capacitating DWS officials by pairing them with retired technical experts, specifically water engineers.
The following outcomes have been achieved:
BLSA encourages whistleblowing with the aim of combatting corruption in both the public and private sectors. In the absence of effective provisions for whistleblower protection, and in recognition of the critical role of whistleblowers in combatting corruption, during 2024 BLSA continued to fund The Whistleblower House, an NGO well positioned to provide the holistic support required by whistleblowers. In the year to date 211 whistleblowers were supported. The support includes financial, legal, counselling and security.
On 1 October 2024, Phase 2 of the Government-Business Partnership was launched by President Cyril Ramaphosa, alongside business convenors and senior government officials, to accelerate inclusive economic growth and job creation. While Phase 1 focused on addressing challenges in energy, transport, and crime, this phase aims to deepen reforms, boost investment, and foster positive national sentiment.
In Phase 2, energy reforms are geared toward long-term security and economic competitiveness, with a goal of maintaining the Energy Availability Factor above 64% and unlocking R23 billion in private sector investment by 2025. In transport, the partnership aims to increase rail capacity, enabling R28 billion in infrastructure investment and supporting economic growth through greater export capacity. Addressing crime and corruption, the partnership is prioritising initiatives to remove South Africa from the FATF grey list, with business support in establishing a Digital Evidence Unit for the National Prosecuting Authority (NPA) to prosecute high-profile cases.
Recognising that sustainable growth relies on job creation, the partnership is working to unlock 400,000 employment opportunities by 2026, especially for young people. It will assist in enhancing the tourism visa system, improve incentives for digital and green jobs, address the work visa backlog, and support township economies. These efforts are complemented by funding and expanding SAYouth.mobi and the YES programme, linking youth with job opportunities.
The National Energy Crisis Committee (NECOM) business and government partnership has been renewed, with Business for South Africa (B4SA) focusing on investment enablement as a critical measure for enhancing business participation and developing the NECOM 2.0 path. The renewed NECOM structure now emphasises the role of CEO sponsors to strengthen political advocacy and facilitates direct engagement with the Minister of Electricity and Energy ahead of the President’s meetings. The updated NECOM workstreams are as follows:
On 16 August 2024, the President signed the Electricity Regulation Amendment Act (ERA) into law, with the proclamation date expected in December 2024. However, the South African Local Government Association (SALGA) raised concerns regarding the definition of reticulation, saying that, in its current form, it will limit the future scope of municipalities in providing electricity and negatively impact the financial sustainability of municipalities. The Minister of Electricity and Energy, Kgosientsho Ramokgopa, agreed with SALGA’s concerns and the potential constitutional implications that may arise. The Minister proposed that the technical team meet to discuss and review possible solutions, as well as whether the bill should be sent back to the National Assembly.
Key assumptions and data modelling have been updated in the draft Integrated Resource Plan (IRP) 2023. Furthermore, the South African National Energy Development Institute (SANEDI) has been tasked with consolidating comments, fuel source mixes, and economic growth assumptions. A stakeholder workshop will be coordinated to review these assumptions and comments, a process expected to take about six months. On 26 November, the Department of Mineral Resources and Energy (DMRE) introduced the remodelled Integrated Resource Plan (IRP 2024). Despite complaints that the consultation process was rushed, Dr. Titus Mathe, CEO of the South African National Energy Development Institute (SANEDI), confirmed that IRP2024, incorporating stakeholder feedback, will be released for public review before its submission to the Cabinet for approval by March 2025.
BLSA and Business Unity South Africa (BUSA) were approached by the Just Energy Transition Project Management Unit* (JET PMU) to plan a stakeholder engagement with the business community. The purpose was to discuss the latest developments of the Just Energy Transition (JET) and explore the role of business in its successful implementation.
*The JET PMU was established by the Presidency in January 2023 to develop the 2023 to 2027 JET Implementation Plan. This plan provides a roadmap for JET execution, convenes role-players, and builds partnerships for successful delivery. It was approved by Cabinet in November 2023 and launched at COP 28 in December 2023.
On 20 September 2024, Eskom and Sasol signed a Memorandum of Understanding (MOU) to assess the LNG import market and required infrastructure, with government support. The collaboration aims to use gas for power generation, enhancing base load electricity and supporting re-industrialisation. However, the industry expressed concerns over Sasol’s commitment to providing gas only until 2027-2028 and the lack of state-driven infrastructure solutions to address the potential risk of limited gas access.
A NEDLAC dialogue session on the Gas Amendment Bill took place on 26 September 2024. During the session issues such as proposed changes, associated risks and stakeholder feedback on the gas sector, including policy, gas pricing, infrastructure, investment opportunities and alignment with South Africa’s energy transition goals were discussed. Business also raised concerns about the excessive powers given to the Minister and the frequent references to the Competition Act. At the session it was decided that NEDLAC would form a task team to continue with engagements on the bill, with experts being nominated to provide technical advice.
On 23 September 2024, the National Energy Regulator of South Africa (NERSA) published Eskom’s Multi-Year Price Determination (MYPD) 6 revenue application for FY 2026 to FY 2028 (1 April 2025 – 31 March 2028).
The MYPD6 application outlines Eskom’s total revenue requirements of R446 billion (FY2026), R495 billion (FY2027), and R537 billion (FY2028).
These translate to proposed average price increases of:
The MYPD methodology aims to achieve cost-reflective pricing to enhance Eskom’s financial sustainability while considering affordability for vulnerable sectors. NERSA is currently conducting public consultations to inform its final decision.
Eskom has also submitted a Retail Tariff Plan (RTP) proposing structural changes to introduce cost-reflective pricing. Subject to approval, these changes will take effect from 1 April 2025.
BLSA members were encouraged to submit their comments on the MYPD6 application to NERSA as part of the public consultation process.
NEDLAC hosted a Dialogue Session on the Carbon Border Adjustment Mechanism (CBAM) on 21 August 2024 to discuss CBAM, the Inflation Reduction Act (IRA), deforestation regulations, decarbonisation and green protectionism. The session highlighted the challenges of balancing environmental commitments with economic competitiveness, particularly for developing nations like South Africa, which is heavily reliant on sectors such as steel and aluminium. The European Union’s CBAM aims to prevent carbon leakage by imposing carbon standards on foreign competition, raising concerns about its impact on developing countries.
Discussions emphasised the need for a collective approach to safeguard South Africa’s interests while aligning with global sustainability goals. Social partners called for a national strategy to address the implications of CBAM and related measures, which could harm key sectors. Recommendations included pursuing World Trade Organisation (WTO) disputes and offering economic incentives to support local industries’ transition to a greener economy. A working group will be established with representatives from labour, business, and government to formulate a collective position on CBAM and other protectionist measures.
On 30 October 2024, the UK Government announced its response to the consultation on the Carbon Border Adjustment Mechanism (CBAM), set to begin on 1 January 2027. The mechanism will cover aluminium, cement, fertilizer, hydrogen, iron, and steel, but exclude ceramics and glass. The import threshold for CBAM application has been increased from £10 000 to £50 000 annually.
Businesses will need to report embedded emissions, either using default values or actual data, with the carbon price aligned to the UK Emissions Trading Scheme. Only explicit carbon prices will be eligible to offset CBAM liabilities. Verification will be required through accredited bodies and businesses must follow guidelines for weighing goods subject to the CBAM.
The CBAM will operate similarly to a tax, with quarterly returns starting in 2028, and His Majesty Revenue and Customs (HMRC) will oversee compliance and penalties. The UK Government will publish draft legislation and guidance before introducing it to Parliament and a CBAM industry working group will be established for further stakeholder engagement.
The BUSA Climate Change Working Group, in which BLSA actively participates, has been engaged in ongoing bilateral discussions with the Department of Forestry, Fisheries, and Environment (DFFE). The intention of the bilateral discussions is, among other things, to establish a platform for ongoing dialogue between BUSA and DFFE to address climate change issues, facilitate the exchange of information, research, and best practices relating to mitigation and adaptation, and contribute to the formulation and refinement of climate-related policies and regulations.
The engagements take place on a quarterly basis but may occur more frequently, as and when required, depending on different sets of issues that may arise and require stakeholder engagement. The first session took place on 23 July 2024 followed by bi-lateral meetings on 21 August & 6 November 2024.
Key outcomes to date
COP29, held in Baku from 11 to 22 November, focused on climate finance, aiming to secure the financial resources necessary to reduce emissions, adapt to climate change, and address loss and damage. The key objective was to agree on a new finance goal, with initiatives like the Climate Finance Action Fund (CFAF) targeting $1 billion to support green projects and SMMEs.
Other initiatives, including the Baku Initiative and the Just Transition Investment Partnership (JTIP), focus on bridging the gap between climate finance, investment and trade, while enhancing resilience through skills development funding.
BUSA issued a statement indicating that they advocate for predictable, grant-based, and concessional climate finance for developing countries, particularly South Africa. BUSA emphasised the importance of private sector involvement in green investments and a just transition. The statement highlighted the need for fair financial support for adaptation, called for a flexible approach to the Just Transition that supports small businesses, and urged developed countries to avoid trade restrictions that could undermine developing nations’ climate goals. BUSA also stressed the need for technology transfer and clear monitoring of South Africa’s Nationally Determined Contributions (NDCs) implementation to ensure progress.
Since the African Continental Free Trade Area (AfCFTA) entered its operational phase in April 2024, there have been several important developments, with input solicited from BLSA members, among others.
The South African National Implementation Committee (NIC) for the African Continental Free Trade Area (AfCFTA) convened its inaugural government meeting, marking a significant step towards the structured implementation of the AfCFTA in South Africa. This initial meeting has set the stage for further actions, including the distribution of formal communication to various stakeholder groups.
Although the government is facilitating the formation of NICs, there is a need for businesses, as the primary beneficiaries, to be actively involved in the formation of NICs. The next step in the process is the official launch of the full NIC, which will serve as a formal structure to oversee the implementation of the AfCFTA. This body will also address and discuss any obstacles that may arise during the implementation process, ensuring that South Africa effectively contributes to and benefits from this pivotal trade agreement aimed at enhancing intra-African trade.
On 26 August BLSA, in conjunction with H.E Wamkele Mene, Secretary General of the AfCFTA Secretariat, hosted BLSA members at ENS Africa for a private sector dialogue session. BLSA members had the opportunity to express their concerns and obtain clarity on several issues.
The AfCFTA Secretariat convened a virtual Stakeholder Engagement from 26 to 27 August 2024, as part of the process of developing regulations for the implementation of the AfCFTA Protocol on Competition Policy. The objective of the meeting was to present the structure and key elements of the regulations, including thresholds for mergers and acquisitions notification, the definition of a dominant position, the powers and procedures of the AfCFTA Competition Authority, the composition and modalities of functioning of the Competition Tribunal, and the establishment of the Competition Network.
The AfCFTA Secretariat hosted the second edition of the Guided Trade Initiative (GTI) from 9 to 11 October 2024 in Kigali, Rwanda. The purpose of the event was to encourage meaningful trade among interested State Parties that have met the minimum requirements for commencing trade under the Agreement, to test the readiness of the private sector, and to test the operational, institutional, legal and trade policy environment under the AfCFTA.
Ongoing Consultations: Rules of Origin on Textile & Clothing, Digital Trade Protocol Annexes, Tariff Offer of Sensitive (category B -7%) and Exclusion (category C – 3%) and Trade in Goods and Services.
The AfCFTA Secretariat sent draft regulations for the implementation of the Competition Policy, requesting Member States to conduct national consultations based on these regulations in preparation for the 8th Meeting of the Committee on Competition Policy, which took place virtually from 18 to 22 November 2024. The Department of Trade, Industry and Competition (DTIC) called for inputs from relevant stakeholders, including BLSA, which were collated and submitted to the Secretariat as South Africa’s position on the draft regulations, for discussions alongside inputs from other AU Member States during the Committee Meetings. The draft regulations cover:
On 22 August BLSA hosted a Council Meeting where Transnet CEO Michelle Phillips and other executives shared their progress, challenges and spoke about potential private sector partnerships.
On 5 November BLSA hosted a special Council Meeting where the Minister of Transport, Barbara Creecy addressed BLSA members. She painted a remarkably clear vision of the five targets she wants to achieve for the logistics system e targets in the next five years, one being the amount of freight shipped by rail going up to 250Mt per year. That would be a marked increase from the 149Mt that was achieved in the last Transnet financial year and would significantly exceed the record for freight volumes of 227Mt set in 2015.
The BUSA-Transnet engagements continue to focus on resolving operational bottlenecks and improving efficiency in South Africa’s ports. These meetings, which began in November 2021 and transitioned to quarterly sessions in July 2023, aim to enhance marine, landside, and multimodal cargo movement, while tracking progress and addressing logistics challenges in line with the National Logistics Coordination Committee’s objectives. Key Transnet divisions and BUSA representatives share real-time data to drive strategic decision-making.
On 28 October, Mr. Solly Letsoalo, Transnet’s Chief Operating Officer (COO), presented updates on Transnet’s operational vision, emphasising efficiency and private-sector collaboration. Seasonal transitions were discussed, with the citrus and reefer season concluding successfully and preparations for the apple and pear season underway. Transnet Freight Rail provided updates on projects to reduce port congestion, while Transnet National Ports Authority discussed port initiatives to support peak periods. Breakthrough continuous improvement projects in Durban, Eastern Cape, and Cape Town, aimed at increasing port throughput and reducing bottlenecks were presented.
The final meeting of the year was on 25 November 2024, focusing on Transnet’s plans for the peak season and alignment with AfCFTA strategy.
BLSA, through BUSA, contributed to the submission regarding the 2024 Draft Taxation Laws Amendment Bill (DTLAB) which was published by National Treasury and the South African Revenue Services (SARS) on 1 August 2024 for public comment. The submission highlighted concerns over several proposed amendments and their potential impact on businesses, including SMEs.
BUSA emphasised the importance of a stable and predictable tax policy in fostering a conducive environment for business growth, innovation, and economic development. Concerns were raised that the proposed amendments could introduce uncertainty, compliance burdens, and unintended negative consequences for businesses, as follows:
Section 9D – Controlled Foreign Companies: The proposed changes could increase administrative burdens and discourage outward investment by South African companies with foreign subsidiaries. BUSA recommended transitional arrangements and clear guidance to ease compliance.
Section 12J – Venture Capital Company Incentives: The planned phasing out of incentives for venture capital in SMEs could hinder access to capital for emerging businesses. BUSA suggested refining the incentive to balance fiscal prudence while continuing to support SMEs.
Section 11D – Research and Development Incentives: Stricter criteria for R&D tax incentives could stifle innovation, especially for incremental innovations. BUSA recommended broadening the R&D definition and introducing sector-specific incentives to foster a more inclusive innovation environment.
Section 9 – Employment Tax Incentive: Removing rollover provisions for excess ETI amounts could discourage SMMEs from using the incentive effectively. BUSA recommended enhancing the ETI by increasing the remuneration and age thresholds and introducing sector-specific incentives.
Proposed Carbon Tax Act Amendments
Coal Mining Fugitive Emissions: Proposed changes to Schedule 1 for fugitive emissions did not align with updated emission factors, which could lead to inconsistencies in carbon reporting. BUSA recommended aligning with the Department of Forestry, Fisheries, and the Environment’s Technical Guidelines to avoid misinterpretations and reduce the need for frequent legislative updates.
Renewable Energy Carbon Offset: The increase in the threshold for eligible renewable energy projects for carbon offset allowances from 15 MW to 30 MW was welcomed, but Business expressed concerns that the eligibility criteria remain restrictive, which could limit offset availability and increase costs. It was also recommended that there be further stakeholder consultation to assess the real-world impact of these changes and advocated for clearer guidelines and a phased implementation approach.
Recommendations
In conclusion BUSA urged the government to adopt a collaborative approach with the business community to refine the proposed tax amendments, ensuring they promote economic growth and development while minimising negative impacts on businesses, especially SMEs. Business stressed the importance of maintaining South Africa’s competitiveness in the global economy by balancing fiscal responsibility with business growth.
The Tax Administration Law Amendment Bill (2024 TLAB) and the Taxation Law Amendment Bill (2024 TALAB) are currently published for comments by the Select Committee on Finance (National Council of Provinces).
On 18 September 2024, BUSA leadership met with the President, the Minister and Deputy Minister of Health, along with senior officials from the Presidency and the Department of Health, to discuss the National Health Insurance (NHI) Act. BUSA was encouraged by Government’s openness to engage on the substantive concerns raised by Business regarding the NHI Act. At the President’s request, BUSA was tasked with preparing a proposal outlining solutions to address concerns raised by business, which would serve as a basis for further discussions with the Government.
BUSA’s primary objective is to render the NHI Act workable, affordable, and implementable, while advancing universal health coverage and ensuring an equitable healthcare system for all.
Business, healthcare providers and a wide range of stakeholders have consistently supported the goal of universal health coverage but have raised concerns about the NHI Act’s potential impact on healthcare, taxpayers, the economy, and investor confidence. BUSA remains committed to working with government and stakeholders to shape a solution that serves the best interests of all South Africans through partnership, collaboration, and transparent dialogue.
To maintain momentum, BUSA is currently reaching out to schedule the next engagement with Government. Additionally, the NHI Act is expected to be discussed at the Government of National Unity (GNU) Clearing House Mechanism. This platform, established by President Cyril Ramaphosa, aims to resolve policy disagreements and disputes within the 10-member GNU. The NHI has been indicated as a topic on the agenda.
During 2024 BLSA received a spike in media inquiries, social media mentions and reach every time we provided commentary regarding the National Health Insurance, the GNU, reforms and the economy, underlining BLSA’s status as a thought leader in the eyes of our followers, including local and international media, the business community, civil society and ordinary citizens.
The GNU era has introduced a period of relative stability at a national level, and with that the tempering of BLSA’s narrative regarding national government performance. These factors have led to a slight decline in BLSA’s media coverage volumes, both nationally and internationally, during the period under review. Nevertheless, BLSA continues to lead its peer group in terms of media reach, with a 49,7% share of voice.
The sentiment in editorial mentions was predominantly neutral (56%). BLSA’s Net sentiment (positive minus negative) saw a 17-point increase, reflecting the more positive slant of BLSA’s editorial content during the period.
Given the extended reporting period, performance was compared to the corresponding period in 2023.
The factors leading to a decline in traditional media coverage volumes for the period have had a similar impact on traffic on BLSA’s social media platforms, which is to be expected given the content overlap.
That aside, the drop in the number of impressions for Facebook and X is mostly because no content was promoted during the current period. Interestingly, engagement rates remained above industry averages, at a time when platforms such as X are experiencing a 40% drop in the user engagement rate globally, year-on-year, according to data presented by OnlyAccounts.io.
X was the top-performing platform for the period, accounting for 79% of social volumes, followed by Facebook with a 14% share. The ongoing improvement in BLSA’s LinkedIn performance metrics highlights its relevance for business-related content. Besides the consistent gains in followers, the rate of engagement is way above industry averages (9.82% vs 2.26%).
