South Africa stands at a pivotal moment in its reform journey. Over the past five years, we have witnessed a profound shift in how reforms are conceived, implemented and sustained. Business now actively participates in reform implementation, bringing expertise and capital to government-led initiatives – a model that is delivering measurable results where decades of policy announcements failed. Rating agencies using traditional sovereign risk frameworks are missing this structural shift that markets have already priced in.

Take Operation Vulindlela, a prime example of institutionalised collaboration. What began as a government coordination mechanism has evolved into something more powerful – a vehicle through which business expertise contributes to and supports national reform priorities. The shift is fundamental: government leads the reform agenda and provides the regulatory framework, while business brings infrastructure investment, operational knowledge, and execution capacity. This is pragmatic collaboration delivering what neither sector could achieve alone. BLSA has long argued that reform delivery must be tracked, evaluated, and understood. That is why we launched the BLSA Reform Tracker, a strategic tool developed with Krutham to monitor nearly 240 reform deliverables across criminal justice, governance, and economic categories. The Tracker provides quarterly updates on reform progress – what is working, what is stalled and what needs urgent attention. The latest review shows 26 reforms completed, 59 showing strong progress, and significant strides in electricity, financial sector, and governance reforms.

In energy, regulatory reform unlocked over R120 billion in private investment, adding 2,650MW to the grid and ending load shedding. In logistics, the opening of Transnet’s network to private operators is catalysing R15 billion in investment, improving freight movement by 10 million tonnes. These are not theoretical gains – they are measurable outcomes driven by business confidence in reform delivery.

Government’s R1 trillion infrastructure programme crystallises this new approach. Government sets the priorities and drives the programme while business provides crucial financing mechanisms and technical expertise for delivery. The enhanced PPP frameworks that make this possible emerged from practical collaboration between sectors that finally understand their complementary roles.

This collaboration has delivered something even more critical: fiscal discipline through shared accountability. Two consecutive primary budget surpluses – including 0.8% of GDP by June 2025 – reflect more than Treasury prudence. Fiscal sustainability is a mutual concern, and business has long supported a prudent fiscal approach. With Debt-to-GDP stabilised at 76.9%, business can invest more confident that public finances are sustainable.

The recent removal of South Africa from the FATF grey list is further evidence of reform momentum. It reflects improved governance, enhanced financial integrity and a commitment to international standards. This milestone should serve as a clear signal to rating agencies: South Africa is not only reforming – it is delivering.

Business Leadership South Africa’s programmes show this active participation. We co-funded the National Prosecuting Authority’s enhanced capacity by funding an independent trust that can support investigative capacity without compromising independence. We funded the National Electricity Crisis Committee, providing resources that have been critical to resolving electricity insecurity. We provided technical expertise that helped government cut water licence approvals from 300 to 90 days. We are actively working with the National Logistics Crisis Committee to improve port and rail performance. This is not corporate charity – it is business investing in structural reform outcomes.

The international precedent for this model is well-established and repeatedly validated by rating agencies. Brazil earned its upgrade after business consortia partnered with government to rebuild critical infrastructure. Mexico’s rating improved following energy liberalisation where private expertise complemented government reform. India’s transformation accelerated when business capabilities aligned with state priorities. South Africa is executing the same playbook, but more systematically through institutional structures like Operation Vulindlela.

What distinguishes our approach is durability. Ad hoc cooperation depends on political personalities and electoral cycles. Institutionalised collaboration survives political transitions. South Africa has built permanent structures where business expertise informs policy implementation, private capital supports public priorities and both sectors share accountability for outcomes. This institutional architecture makes our reforms more sustainable than those of our peers.

The IMF’s estimate that sustained structural reforms could raise South Africa’s potential output by 9% is based on demonstrated delivery in energy, logistics and telecommunications. When business commits resources and expertise to government-led reforms, implementation certainty dramatically improves. Markets have already priced this in. International investors understand that reforms with business participation are more likely to sustain.

Over the past two years, more than R500 billion has been mobilised into infrastructure, energy and logistics – not through isolated private initiatives but in direct response to a clearly defined government reform agenda. This alignment is delivering measurable outcomes: regulatory amendments unlocked private generation and expanded grid capacity; spectrum auctions catalysed telecommunications investments; rail network liberalisation improved freight efficiency. Furthermore, visa reforms, co-designed with business, accelerated the flow of skills and tourism. Each success reflects a deliberate formula – government provides leadership, policy certainty and the regulatory framework, while business brings the execution capacity, technical expertise and capital needed.

South Africa has entered a new era of reform – one defined not by promises, but by delivery. Government-led reform, strengthened by deep and sustained business participation, has replaced the old cycle of announcements without action. Through institutionalised collaboration, private capital is unlocking public priorities and market discipline is reinforcing state coordination. The results are visible: energy security is improving, logistics are moving, infrastructure is expanding and fiscal sustainability is being restored. The FATF grey list removal confirms that reform is real, measurable and internationally recognised. Rating agencies must now catch up to this reality. South Africa has built a reform model that is working – credible, coordinated and resilient. Markets have validated it. It is time sovereign ratings do the same.

Business confidence amplifies government reform impact in ways that policy alone cannot achieve. Every improvement in sovereign rating translates to expanded economic activity, job creation and increased tax revenue. Business understands this calculus intimately. We are not seeking charity from rating agencies – we are highlighting how business participation strengthens government reform delivery.

Our thought leadership has consistently emphasised that political and economic stability are essential for reform success. In recent articles, I have highlighted how policy continuity, institutional resilience and genuine business-government partnership are the bedrock of reform delivery. The Operation Vulindlela model, which embeds business expertise into government reform structures, is a global best practice. It ensures reforms survive political transitions and remain focused on outcome.

The comparative record across emerging markets is instructive. Countries that achieved sustainable upgrades did not do so through government reform alone – they did it through demonstrable business participation that convinced rating agencies of durability. South Africa’s model is more sophisticated, more institutionalised and delivering faster results than many of these precedents.

Yet sovereign risk models that evaluate government action in isolation persist, using incomplete frameworks for a complex reality. The relevant measure is not government capacity alone but the depth of business participation in reform implementation. These collaborative structures exist, they are delivering results, and they will survive political transitions because both sectors have too much invested to let them fail.

Government-led reform with substantive business participation has replaced the endless cycle of announcements without delivery. The question facing rating agencies is whether they recognise how modern reform is working – through government leadership enhanced by business expertise, public priorities supported by private capital, state coordination strengthened by market discipline. South Africa has built this model. It is working. Markets have validated it through capital flows and risk repricing. It is not perfect, but it is demonstrably working. And it deserves the same recognition rating agencies have given to similar transformations elsewhere.

 

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