06/07/2025 | By Busiswe Mavuso
One of the positive features of the government of national unity has been the openness of ministers to engage with business. A better understanding of each other’s needs and objectives can help all of us make progress. Last week we were privileged to host the Minister of Electricity and Energy Dr Kgosientsho Ramokgopa to address our members on the progress of electricity systems reform. Later this month we will host the Minister of Trade, Industry and Competition Parks Tau and his colleague, the Minister of International Relations and Cooperation, Ronald Lamola. These ministries, among others, play an important role in affecting the business environment and the ability of businesses to invest and grow.
The legislative foundation for competitive electricity markets is now in place. The amended Electricity Regulation Act enables Eskom’s restructuring into separate generation, transmission and distribution entities, breaking the monopoly that constrained our energy future. Most significantly, the Independent Transmission Project Office is established and will unlock billions in private transmission investment, starting with 1,164 kilometres of new lines that will release 3,200 MW of stranded renewable capacity in the Northern and Western Cape.
With Eskom’s availability factor now stabilising around 65% and additional capacity from Medupi and Koeberg units coming online, we have breathing room to implement structural changes properly. But immediate wins are within reach if we can resolve current bottlenecks.
Current grid access disputes are blocking renewable energy projects and preventing energy traders from participating in virtual wheeling – undermining the very competition we’re trying to create. Some exporters face losing EU market access within 12 months due to carbon border adjustments, while we struggle to issue renewable energy certificates quickly enough. The minister’s commitment to have Nersa’s board chair lead the resolution of grid access rules offers a concrete near-term milestone we can track.
The underlying challenge is more fundamental. Municipalities owe Eskom over R110bn, while customers owe municipalities over R370bn – a payment crisis that threatens system sustainability. Over 95% of municipalities lack qualified electrical engineers, undermining their ability to collect revenue, maintain infrastructure, or plan for growth. Our current distribution system is simply not fit for purpose, and numerous interventions to address the culture of non-payment have failed to solve the problem.
As Minister Ramokgopa explained, Eskom must serve as a supplier of last resort for millions of poor South Africans, but this social obligation requires a sustainable financing model that current structures cannot deliver. The Distribution Agency Agreements being developed could address this systematically, but implementation will require the kind of coordinated effort that has made our energy partnership successful.
The minister acknowledged the tension between urgency and implementation quality directly – slow progress risks undermining market sentiment while rushed reforms could trigger system failures. His message was clear: government understands the urgency but recognises that getting complex reforms right takes time. It’s a difficult balance, but one made easier through the collaborative approach we’ve established.
What gives me confidence is how this partnership has evolved. The minister explicitly credited business as “very central in the resolution of the energy question” and accepted our offer to provide embedded skills capacity – from modelling expertise to policy articulation support. This isn’t just consultation; it’s genuine co-creation of solutions where business expertise can help government navigate reform complexity.
While full transmission system independence may take several years, we can accelerate progress on immediate priorities: resolving grid access rules, enabling curtailment that could add capacity quickly, and developing the municipal engineering capacity that underpins system sustainability. These are concrete areas where business skills and government authority can combine for rapid impact.
This collaborative model has proven successful across government – from home affairs to basic education. As government focuses increasingly on local government delivery, we’re ready to contribute capacity and insight where it’s most needed.
I am optimistic that we can maintain momentum. Minister Ramokgopa’s detailed engagement demonstrates how business is now viewed as a genuine partner in solving complex policy challenges. The foundation is solid, the partnership is proven, and the pathway is clear – even if the timeline tests our collective patience.
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One challenging issue for government and business is the international trade environment. The meeting this month with the ministers of trade, industry and cooperation as well as international relations and cooperation will be a good opportunity to explore how we can work together to navigate these pressures. This week brings a critical milestone when the United States’ tariff regime is set to default to 30% on our manufactured goods and some agricultural exports. The White House has indicated it will send details of a new regime before Wednesday, creating much uncertainty.
The challenge is to focus on what remains in our control and make strategic decisions that maximise economic opportunities from trade. US trade constraints represent an exogenous shock, but one we must manage together through the same collaborative approach that has proven effective in energy reform.
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BLSA is a business organisation that believes in South Africa’s future and shares the values set out in the Constitution. BLSA is committed to playing its part in creating a South Africa of increasing prosperity for all by harnessing the resources and capabilities of business in partnership with government and civil society to deliver economic growth, transformation and inclusion.
