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06/09/2026 | By Busisiwe Mavuso
Last week gave us plenty of signs that reform is moving forward, but business confidence is far behind. That gap reflects the path we still must follow to turn reform into a real improvement in the operating environment.
National Treasury, through the Development Bank of Southern Africa, has issued a call for proposals for advisors on the unbundling of Eskom’s transmission assets into an independent transmission system operator (ITSO). This is a significant step. The transaction is complex – it will require the approval of Eskom’s lenders – but such restructurings have been successfully concluded in many countries, and there is substantial international experience to draw on. I am confident that Treasury will secure the right expertise.
The timetable set out in the RFP is ambitious – the transaction must be concluded in the next 18 months. I’ve been calling for the swift implementation of the unbundling plan – which is part of the wider electricity restructuring process that is settled policy, for some time. It will be highly positive if this timetable can be achieved. While the plan has faced resistance in some quarters, I believe the key role players are now aligned on seeing it implemented. A week ago I met with the chairman of Eskom, Mteto Nyati, and group CEO Dan Marokane to discuss our positions on the unbundling. I’m pleased to say both BLSA and Eskom fully support the electricity reform programme as outlined in a joint statement following our engagement.
The process toward unbundling can now accelerate. I know that Eskom’s lenders are willing to engage to find workable solutions. Treasury’s advisors will have an important role to play in aligning those role players and designing a transaction that works for everyone. BLSA will play its part in supporting all role players to achieve that outcome. It is critical to establishing the foundations of growth in our economy.
There was also an update last week on progress with the rail network statement. This is a crucial document that sets out how private operators can access the national rail network. It is important for the logistics reform process and has the potential to unlock billions of new investment in rolling stock and rail infrastructure. The Department of Transport has now said it will publish the final statement at the end of September. This is behind schedule, but better a high-quality network statement that works than meeting a deadline with something that doesn’t work.
Logistics and electricity are growth enablers. They are the preconditions for the investment that will drive growth toward our 3%-plus target and the job creation that would follow.
And there was also positive news on the trade front. An MOU was signed between the India Commonwealth Trade Council and the India South Africa Chamber of Commerce. Improved trade relations are very important for the business outlook. I wrote last week about the absence of a coherent trade strategy for South Africa. India is an example of a much more coherent strategy – it has 14 signed free trade agreements, vs the six or seven agreements and customs union arrangements we have. It has six preferential trade agreements when we have just one. We have had a long stop-start engagement with India on trade opportunities, and perhaps this MOU will support progress toward a mutually beneficial outcome.
Also on the trade front was the two-year extension of the African Growth and Opportunity Act last week. The trade access this provides is partly compromised by US President Trump’s tariffs, but it does positively affect some product lines that we export to the United States. The extension is welcome, but it is too short to materially shift investment in SA, which would require much longer visibility.
These positive signals stood in contrast with business confidence indicators that also came out last week. The RMB/BER business confidence indicator fell one point to 38 in the third quarter, a level that indicates generally negative sentiment, with 62% of respondents dissatisfied with prevailing business conditions. This is down significantly from the 47 we saw in Q1. This reflects that businesses are not yet feeling the impact of reforms on the ground. The progress that we saw last week is important – they are steps toward a new operating environment in which electricity is priced through competitive markets and logistics services can be accessed through multiple operators. But it is only when we get to fully functioning and competitive markets for electricity and logistics services that business sentiment will respond; when companies start to see their input costs falling and service reliability improving, they start to build confidence. That is the goal. We must not slow down before we get there.
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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.
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Last year, BLSA launched the BLSA Reform Tracker, an innovative online platform designed to monitor and evaluate the progress of key government reforms affecting the business environment and economic growth. The fourth BLSA Reform Tracker Quarterly Review, covering April to June 2026, shows that South Africa’s overall reform completion index fell to 71.5 from 71.7 in the previous quarter, though it is still 26% above the March 2024 baseline. Read the Quarterly review for 1 April to 30 June here.
