Electricity milestone gives us encouragement to do more

Dear Fellow South African, 

Last Friday marked 100 days since South Africa last experienced load shedding. This is the longest continuous period without load shedding since 2020.

While this is a welcome milestone, it is not a reason to relax. Our electricity system remains vulnerable and we cannot yet rule out a possibility of further load shedding.

Rather, this milestone provides encouragement for us to do more and to work faster to ensure a secure supply of electricity now and into the future.

We have seen real progress in the implementation of the Energy Action Plan, which we initiated in July 2022, and are now witnessing some of the results of the cooperation between government, business and other social partners.

Thanks to the diligent implementation by Eskom of its Generation Operational Recovery Plan as well as a stepped up maintenance schedule, there has been a marked improvement in the performance of the power stations that produce the bulk of South Africa’s electricity. 

Eskom last week successfully commissioned Unit 5 at the Kusile power station, adding an additional 800 MW to the grid. This follows the power utility’s work to return three units at Kusile to service ahead of schedule. 

The improvement in the reliability of power supply has been a relief for households, who have been able to go about their daily lives without the inconvenience of loadshedding. It has also been a great relief for businesses.

The latest consumer confidence index compiled by the Bureau for Economic Research (BER) found that the suspension of load shedding was a factor that contributed towards increased consumer confidence in the second quarter of this year.

This improvement is also a boost to the national economy, which is reliant on the availability and reliability of electricity supply for growth. There is cause for optimism that business and investor confidence will improve. 

Earlier this month steelmaker ArcelorMittal announced that it would not go ahead with plans to close its operations in Newcastle and Vereeniging, citing improvements in the country’s electricity and logistics situations as among the factors behind its decision. 

In its April Monetary Policy Review, the South African Reserve Bank noted that “as electricity supply improves gradually, underpinned by the ongoing private investment in renewable energy generation and increased maintenance by Eskom”, South Africa’s near and medium-term outlook for growth is set to increase. 

The Reserve Bank underscored the importance of the full implementation of energy and logistics sector reforms if growth is to improve. 

We are committed to continue and complete the far-reaching structural reforms we started during the sixth administration to resolve the immediate electricity supply challenges and lay the groundwork for energy security into the future. 

These reforms included the removal of the licensing threshold for new power generation projects, tax incentives for rooftop solar, opening more bid windows for renewable energy projects, and improving Eskom’s operational viability. 

The latest milestone reached in the structural reform journey is the commencement of trading last week of the National Transmission Company South Africa (NTSA), which will own and operate the country’s national electricity transmission system. This forms part of the reforms we have been driving to establish an electricity market that will enable competition, secure supply and revolutionise the energy sector. 

As the Government of National Unity begins its work, we will sustain this momentum. 

For us to continue to implement the Energy Action Plan and support the hard-working management and staff of Eskom, who are day by day helping to bring us out of this crisis, we must all pull in the same direction. 

By focusing on the broader picture and by scaling up what has already been achieved, we are in a far better position to achieve the task we have set ourselves: to end load shedding and achieve an energy-secure future. 

We have reached 100 days without load shedding by working together. 

This should encourage us to redouble our efforts and to strengthen the collaboration between all stakeholders in both the public and private sectors.

With best regards,

A new era of partnership and national unity

Dear Fellow South African,  

In the coming days, the ministers and deputy ministers of the new Government of National Unity will be sworn in. This is a significant moment in our country’s democracy.

We have made good on our promise to the South African people to work together as political parties for the good of the country, and to deliver a government that will be united in action and purpose. 

This provides a firm basis for greater stability, coherence and a focus on implementation.

Even in some of the world’s most established democracies, the formation of multi-party governments is often protracted and fraught with challenges. That we have reached this pivotal point just over four weeks since the election results were announced is a credit to our constitutional order. It is also testament to the authentic, collaborative spirit that has underpinned the negotiations over the past few weeks.  

This is the first time in South Africa’s history that such a broad range of parties, from across the political spectrum, will constitute a government. In mandating us to form a government that serves all, the South African people have a rightful expectation that the seventh administration begins its work as soon as possible.

South Africans appreciate that a GNU is the best way to take our country forward. As political leaders, we must prove ourselves worthy of the trust our citizens have placed in this government.

The partnership between the GNU parties is guided by a Statement of Intent, which outlines fundamental principles and a minimum programme of priorities. 

All the parties have made a commitment to respect the constitution and to promote a accountable and transparent governance, evidence-based policy and decision-making, the professionalisation of the public service, integrity and good governance. 

The incoming government will prioritise rapid, inclusive and sustainable economic growth and the creation of a more just society by tackling poverty and inequality. It will continue the economic reforms that are underway in key industries like electricity, telecommunication, water and transport. 

The new administration will build on the progress that has already been made in the drive for greater investment in infrastructure and an improved environment for business.

Guided by the Statement of Intent, the GNU will safeguard the rights of workers and ensure there is adequate social protect for the poor and vulnerable. The government will invest in South Africa’s people through quality education and health care. It will work to build state capacity, address crime and corruption and strengthen social cohesion. The administration will pursue a foreign policy based on human rights, solidarity and peace.

While the ministers and deputy ministers who make up the National Executive come from different parties, they will be expected to serve the people as a whole. They will be expected to implement a shared mandate and a common programme of action.

The new government will soon hold its first lekgotla to collectively develop the programme of government for the next five years. This will be outlined in greater detail in the Opening of Parliament Address to be delivered in just over two weeks’ time.

In the spirit of partnership and collaboration, the incoming government will work together with other formations to convene a National Dialogue. All parties, civil society groups, labour, business and other stakeholders will be invited to work together to address the critical challenges facing the nation. 

We are determined that the principles and programme that underpin the Government of National Unity extends beyond the institutions of the state. 

This is an opportunity for all South Africans to work together more closely and with greater purpose to ensure that we build a South Africa for all.

With best regards,

Government of national unity must put people’s interests first

Dear Fellow South African,  

The formation of the second Government of National Unity (GNU) is a momentous development in South Africa’s democracy. 

Every effort must be made to ensure that the GNU remains true to its founding spirit of collaboration in good faith to drive a programme that improves the lives of all South Africa’s people. 

South Africans made clear with their votes in last month’s elections that they want their elected representatives to put aside narrow interests and work together to build the country. To do so, the  GNU cannot be preoccupied with jockeying for positions, tussles over appointments or squabbles within and between parties.

The success of the GNU will be measured by the extent to which we are prepared to focus not on who will govern, but on how we will govern, together. 

The first GNU was established in 1994 to promote nation building and inclusivity from a racially divided past during a period of political transition. Among its main tasks was to ensure the passage of a new democratic Constitution.  

Giving effect to the principles of that Constitution and the Bill of Right must be the overriding focus of this GNU. This will be done by pursing a common programme to eradicate poverty and build a more equal society, to create jobs, and to make government truly work for the people. 

The GNU Statement of Intent provides a solid base for genuine cooperation between parties across the political spectrum who have signed up of their own accord. 

The Statement of Intent commits the signatories to a set of foundational principles that include respect for constitutionalism; accountability, transparency and community participation in government; evidence-based policy and decision-making; professionalisation of the public service; integrity and good governance. 

The parties to the GNU have agreed on priorities for the incoming administration. At the top of the list of priorities is the achievement of rapid, inclusive and sustainable economic growth to create jobs.  

It will be critical that the GNU stays the course on the structural reform that is underway to improve the business operating environment and establish South Africa as an investment destination of choice. These reforms are necessary to resolve longstanding challenges in key industries and create more jobs and opportunities. We will need to build on the progress that has already been made, while accelerating the pace of reform. 

The fact that there is broad consensus among the parties on the priorities of the incoming administration gives us encouragement that the GNU will indeed take the country forward. Emanating from the priorities outlined in the Statement of Intent, the parties will further refine the GNU’s programme, including through the proposed National Dialogue process. 

We remain committed to consensus-building and to the representation of a broad range of interests and viewpoints within government. At the same time, we are all keenly aware that South Africans expect action, implementation and results. 

In a robust defence of the first Government of National Unity in 1994, President Nelson Mandela described it as an enduring national consensus “that is neither an imposition of one party over others, nor a honeymoon premised on the fickle whims of a fleeting romance”. The same is true today. 

As parties finalise the modalities of the GNU guided by the Statement of Intent, the days and weeks that lie ahead will be crucial. 

The country’s hopes are pinned on the success of the GNU. Our stated commitment to work together constructively and for South Africa’s benefit has generated a great deal of goodwill that we should not squander.  

South Africans are watching. We should not waste our energies on those who stand in the way of our country’s progress or lose momentum over differences that can be resolved. 

We need to demonstrate in both word and deed that our programme is clear, coherent and sustainable, that our collaboration is genuine, and that the interests of the people will always come first. 

With best regards,

We need to stay the course to grow the economy and create jobs

Dear Fellow South African, 

With the 2024 elections behind us and discussions between political parties around the formation of a government ongoing, there is broad support for the continuation of economic reforms.

At this important moment in the life of our nation, eradicating poverty and inequality and reducing unemployment must remain our overriding collective priorities. We cannot address these challenges and improve the lives of our people without attracting more investment in our economy and accelerating growth.

Economic growth, transformation and job creation has been at the centre of the programme of the Sixth Administration. Since 2019, we have implemented a range of growth-enhancing structural reforms to remove the constraints which have held back growth, to attract higher levels of investment, and to make our economy more efficient and competitive. 

In 2020 we established Operation Vulindlela, a government-wide initiative to accelerate the implementation of these reforms and support economic recovery.

Because well-functioning network industries are vital to economic growth, we have undertaken far-reaching reforms in energy, logistics, the water sector and telecommunications.

These reforms include an overhaul of the energy sector to enable efficiency, stability and greater investment in electricity generation and to introduce a more competitive electricity market. We have introduced private sector participation in the operation of port terminals, enabled open access to the freight rail network and completed the auction of high-demand broadband spectrum. While we recognise the value of public-private partnerships, we have stressed that the state must continue to play a strategic role in the development and ownership of public infrastructure in the interest of the people.

To attract critical skills needed to boost the economy and to grow the tourism sector, we have also implemented reforms to overhaul the visa regime.

The progressive implementation of these structural reforms has helped to improve investor confidence. This has in turn enabled us, despite an extended period of load shedding, to attract investment into the economy across a range of industries.

The structural reform process has produced tangible results and laid the groundwork for sustainable growth into the future.

Regardless of the form or composition of the incoming administration, it is important that the momentum of reform be retained and sustained. While we have come a long way in the reform journey, there is much work that still needs to be done to reignite growth in our economy. A change in direction would derail the positive progress that has been made and take us back to the starting blocks. 

This sentiment was echoed in a recent study by the Bureau for Economic Research (BER), an independent research institute, on South Africa’s economic trajectory following the recent general elections. Pointing to existing structural reforms, the BER commented that there is no need ‘to reinvent the wheel’, and that sustained implementation of the existing reforms had far greater currency than ‘miracles or fairy tales for a better outcome.’ 

We have said that it will take time for the impact of many of these reforms to be fully felt. At the same time, the process of recovery and rebuilding is well underway.

The electricity sector is one such example. The implementation of the Energy Action Plan that we announced in 2022 has seen accelerated procurement of new generation capacity, a growing number of new energy projects being connected to the grid, and a surge in rooftop solar energy. These developments, together with Eskom’s ongoing work to improve the maintenance of its power stations, have helped to reduce the severity of load-shedding.

These reforms must continue alongside measures to advance economic inclusion, such as skills development, addressing spatial inequality and investing in skills development and public employment programmes.

To realise higher economic growth and create more jobs, we need a combination of structural reforms, increased investment and sound macroeconomic management. As the Minister of Finance noted in this year’s Budget Speech, successful efforts to improve the fiscal position, complete structural reforms and bolster the capacity of the state will in combination reduce borrowing costs, raise confidence, increase investment and employment, and accelerate economic growth.

Modelling by the National Treasury showed that the successful implementation of key reforms could raise GDP growth to over 3% a year, add an additional R600 billion to revenue and create a substantial number of additional jobs over ten years.

This approach is supported by the BER study, which shows that continuing the path of reform could increase growth. This would start to make a meaningful dent in our unemployment rate and usher in a new era of growing prosperity for all.

By deepening our partnership as government, business and labour, by accelerating structural reform, by continuing the work to strengthen state capacity and improve the operation of state-owned enterprises, we are firmly on course for realising greater economic growth and creating more jobs.

As the country prepares for a new democratic administration, all parties need to work together to sustain the momentum of reform, growth and transformation. A stable and effective government committed to economic reform will enable us to build an inclusive and growing economy that benefits all South Africans.

With best regards,
 

The annual Africa Day event took place on Wednesday, 29 May 2024, at the Marriot Hotel in Lisbon. The theme chosen by the African Union for Africa Day was, “Educate an African fit for the 21st Century: Building resilient education systems for increased access to inclusive, lifelong, quality, and relevant learning in Africa”. The Africa Day commemoration is a moment for the continent to pause, reflect, and celebrate the unique African identity and cultural expression.

The South African Embassy was one of the fifteen African Embassies in Portugal, that participated on the day with a special exhibition of arts and crafts, and a dining experience of the various food and drink from the continent. Following speeches from the representatives of the Mayor of Lisbon and the Portuguese Foreign Ministry, as well as the Dean of the African diplomatic corps, the special guests were entertained by some light music and dancing. Pictures reflect the celebration of Africa Day as well as the South African Embassy’s art and craft table.