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Radical economic reform is required to achieve this higher level of economic growth and create a virtuous cycle of higher confidence in the short term. This improves growth outcomes over the longer term.
By alleviating load shedding, improving the performance of the logistics system, reducing the cost of data, improving water supply, and enabling the country to attract the skills it needs, the reforms already underway through OV Phase I will provide a significant boost to the economy in the medium term once fully implemented.
The areas of focus of OV comprise the backbone of the South African economy and improving performance of these sectors is key for long-term growth and global competitiveness. As a small open economy, facing shifting global headwinds,
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creating a favourable domestic environment is critical to support local firms to such that they are not only resilient but also able to take advantage of changing world markets.
What do we want to achieve going forward?
In order to drive more rapid and inclusive growth over the next five years, we must accelerate economic reform. A commitment to swift implementation of reforms is required across government to lower the cost of doing business, reduce regulatory bottlenecks and provide policy certainty. This in turn will promote investment, support export orientation, enable job creation and reinforce growth.
Enhancing efficiency in key sectors such as transport and logistics by restructuring state-owned entities, improving efficiency of investment and encouraging competition will bring down admin prices over the long term.
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The immediate priority is therefore to sustain the momentum already developed and follow through on the implementation of existing reforms, in order to realise their full impact. This will require completing the reforms underway as well as deepening those reforms which have already been initiated – in the energy, logistics, and water sectors and visa regime. However, other structural constraints to growth remain thus, additional reforms will be prioritised in the next phase of OV to promote higher and more inclusive long-term growth.
The reform agenda will also prioritise (a) strengthening local government and improve the delivery of basic services; (b) harnessing digital public infrastructure as a driver of growth and inclusion; and (c) creating dynamic and integrated cities to enable economic activity.
Government will also be prioritising improving the effectiveness and efficiency of spending by making progress on the implementation of recommendations of spending reviews. With over 240 spending reviews undertaken by National Treasury and Provincial treasuries since 2013, government has a solid foundation with which to not only introduce cost-cutting measures, but to systematically assess whether public expenditure is effectively aligned with the priorities of this government and delivers the best possible value for money.
In closing, the road ahead is challenging but with agility, commitment to reform, we can achieve greater competitiveness and a more inclusive economy in line with this administration’s priorities.
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Issued by Treasury, 8 May 2025
