Ramaphosa launches Phase 3 Government/Business partnership — 3% growth goal remains elusive

President Cyril Ramaphosa unveiled the third phase of the "Government/Business Partnership" in an aim to address the persistent challenges that hinder South Africa's economic growth. Despite the elusive 3% growth target, Ramaphosa emphasized the importance of working together between the government and business sectors to achieve real reforms.

The collaboration strives to fix the numerous issues plaguing the economy by targeting Eskom's restructuring, private investment in Eskom, and the implementation of the long-awaited mining cadastre by March 2027.

Ramaphosa clarified that the primary objective is to lift economic growth above 3%, but it should not be the ultimate ambition. In October 2024 when phase 2 was launched, the objective was to achieve growth of more than 3% by the end of 2025, which was not reached. Last year's growth stood at 1.1%, and the economy may even be contracting.

However, some achievements have been made, such as removing South Africa's FATF grey listing under phase 2. The ambitious goals in phase 3 include 7 high-impact prosecutions by Q1 2027, backed by private sector legal, forensic, and analytic capacity.

Additionally, phase 3 aims for private train operating companies to operate on Transnet's lines by 2027, the launch of the South African Wholesale Electricity Market by early 2027, and the rollout of the mining cadastre by March 2027. The mining sector, along with tourism, agriculture, and agro-processing, has been included in phase 3 due to their potential to attract investment, generate foreign revenue, strengthen localisation, and create employment at scale.

While some may view these launches as mere rhetoric, real reforms are indeed taking place, and the upgrades in South Africa's credit ratings are evidence of this progress. Collaboration between the government and business is essential in driving the economy forward.