Business Leadership South Africa (BLSA) CEO Busi Mavuso has indicated that while structural reforms in the country are accelerating, business confidence has not kept pace. In her weekly newsletter, Mavuso noted that the RMB/BER business confidence indicator dropped to 38 in the third quarter, a significant decline from 47 in the first quarter. This level suggests generally negative sentiment, with 62% of respondents expressing dissatisfaction with current business conditions, implying that businesses have not yet experienced the tangible benefits of the reforms.
Mavuso highlighted that critical reforms are moving forward, particularly within the electricity sector, where Eskom is undergoing unbundling into generation, transmission, and distribution entities. This initiative, part of Operation Vulindlela (a joint effort by the National Treasury and President Ramaphosa's office established in 2020), aims to create a more competitive and efficient power supply. Similarly, progress is being made in logistics, with updates on the rail network statement outlining private operator access, which could attract billions in new investment for rolling stock and infrastructure.
Despite these positive signals in reform efforts, the lack of improvement in business confidence suggests a disconnect. Businesses need to see consistent operational reliability, reduced input costs, and improved service quality before their sentiment will shift. Mavuso emphasized that while reforms are underway, the true value lies in their full implementation and the creation of fully functioning, competitive markets for essential services like electricity and logistics to truly spark investment and economic growth.
