How world sees SA — FT: The ANC’s sudden embrace of South African business

Key topics:South Africa’s 2023 power crisis triggered massive blackouts and economic strain.Private sector joined Operation Vulindlela to fix electricity and infrastructure.Reforms boosted investment, grid reliability, and private-sector economic influence..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By David Pilling, Joseph Cotterill and Monica Mark in Johannesburg.In 2023, South Africa faced what one minister in the government of the ruling African National Congress called “the single biggest existential challenge in South Africa’s post-apartheid history”.The crisis he was referring to was not gang violence, lingering desperate rates of poverty among the Black majority population or deep levels of corruption within his own party — all problems eating away at the legitimacy of his government. The crisis Kgosientsho Ramokgopa, the electricity minister, was talking about was much simpler than that: the lights had gone out.As the year came to a close, rolling blackouts of up to eight hours a day had prostrated the country for no fewer than 280 days. Power cuts had brought much of industry to a standstill and were pushing the long-stagnant economy deeper into recession. There was even fear the entire grid could collapse, potentially plunging the socially charged country into chaos.Years of mismanagement at Eskom, the state-owned energy monopoly, had been exacerbated during the presidency of Jacob Zuma from 2009-18 when it, along with other state institutions, had been “captured” in a web of corruption..Read more:.South Africa eases antitrust rules to help power-strained industries survive.As the crisis escalated, business collectively took a decision that it could not stand on the sidelines. “People put their shoulder to the wheel for the sake of the country,” says Martin Kingston, Africa head for investment bank Rothschild and chair of Business for South Africa (B4SA), a partnership of companies and executive leaders.This roster of private companies including Sasol, Anglo-American, Babcock and many other miners and equipment makers started working closely with the government. They paid for the dispatch of 350 engineers, technicians and experts to repair juddering power stations and to lay the foundation for the restructuring of the failing state monopoly..Business also rallied to President Cyril Ramaphosa’s call to generate solar and wind power. For years they had been actively discouraged, through a 1 megawatt cap on private power generation. Sections of the ANC saw competition as a stealth privatisation that would undermine not only Eskom, but also the coal industry, one of the sectors where Black entrepreneurs had done best.But Ramaphosa, long criticised for being overly cautious, finally put his foot down, raising the cap on private generation to 100MW before scrapping it altogether. Private companies initiated projects that would add many gigawatts to the creaking grid.The emergency collaboration with business began to have an impact. Rolling blackouts struck on only 17 days of 2025, compared to nearly every day of 2023. The experience marked a profound shift for the ANC, which had long been suspicious of a business establishment that it characterised as “white monopoly capital”, unable to lead the radical economic transformation that the ANC had promised.As the electricity crisis abated, business influence spread, marshalled under an initiative codenamed Operation Vulindlela, or “open the way” in isiZulu and isiXhosa. Steadily, and against the wishes of some ANC diehards, the private sector gained a foothold in parts of the economy from which it had previously been excluded, from rail to ports and even crime prevention.“Business probably has more influence on government than ever before,” says Jonny Steinberg, an author and historian. The “nuts and bolts” of both physical infrastructure, as well as policy and regulation, are being steered by business to an unprecedented degree, he says.“The results speak for themselves,” says Kingston of B4SA. In October, the country was removed from the “grey list” of the Financial Action Task Force, an intergovernmental watchdog, after a period of intense activity by the crime and corruption “work stream”, one of four B4SA helped convene to co-ordinate government and business strategy.Another work stream, covering transport and logistics, has begun to reverse a calamitous slide in the tonnage of minerals carried on the dysfunctional state-run rail system.With the lights back on and freight beginning to move again, in November South Africa won its first credit upgrade in two decades after S&P Global Ratings lifted the sovereign rating by one notch to double B.Investor confidence is also up. According to Nedbank, private sector investment announcements tripled last year to more than R382bn ($23.6bn). Since the end of 2023, the South African rand has been the world’s best performing major currency on a spot basis reflecting immediate exchange rates, up nearly 15 per cent against the dollar. Over the past 12 months, the JSE all-share index is up 37 per cent in rand terms.Growth reached 1.2 per cent in 2025, hardly transformative, but double the rate of the previous year. For the first time in a long time, economists are talking enthusiastically about “green shoots” and forecasting year-on-year expansion.“I really think we have done a brilliant job as a country in putting the necessary reforms in place,” says Busisiwe Mavuso, chief executive of Business Leadership South Africa. “These are now yielding results.” Operation Vulindlela, a joint operation between the presidency and the Treasury, was established in 2020. It was designed as a rough equivalent of former British prime minister Tony Blair’s Delivery Unit, which sought to implement efficiency targets and drive broader public service reforms.“It’s a business unit. We just gave it a South African flavour,” says Rudi Dicks, who is co-head of the initiative, referring to the operation’s name.Initially, Operation Vulindlela, or “OV” as many refer to it, ran in semi-obscurity. One life-long member of the ANC, who works in the private sector, calls its reform agenda the ANC’s “dirty secret”.But gradually, what had started out as a narrow exercise to improve government efficiency has become a more ambitious drive for structural change. As its successes have mounted, it has come more into the open..This month, Ramaphosa mentioned it three times in his State of the Nation address to parliament in Cape Town, saying: “Through Operation Vulindlela, we are working to transform the structure of our economy, to fix our infrastructure and make our electricity, water and logistics sectors more competitive and efficient.”Dicks, a quietly spoken former union boss who many in business now regard as the most important member of the administration, says: “The government was not delivering on the key reforms. We were assuming delivery would just happen.”Steinberg, the author and historian, attributes growing reliance on Vulindlela to two factors. One is the “rapid meltdown of the state” during Zuma’s presidency and a resulting collapse in government competence that “shocked the ANC to its core”.The other, he says, is the singular trajectory of Ramaphosa, a protégé of Nelson Mandela who went on to become a top business executive before eventually succeeding Zuma as president in 2018. “I’m not sure that this level of deep [private sector] involvement would have happened under any other president,” says Steinberg.At the start of his presidency, Ramaphosa had to tread carefully. “He didn’t have a political mandate to pursue economic reforms,” says Simon Freemantle, senior political economist at Standard Bank. “They sought to characterise Ramaphosa as a stooge of capital,” he says, referring to opposition both within the ANC and in breakaway parties to its left.Many of the ANC members most hostile to business — proponents of so-called “radical economic transformation” — quit to join either Julius Malema’s Economic Freedom Fighters or Zuma’s uMkhonto weSizwe (MK) party, formed in 2023.If the electricity crisis helped make the case for co-operation with the private sector, the ANC’s thumping losses in the presidential elections of 2024 drove it home. The ANC vote share slid to 40 per cent, convincing many party members that they needed to shed ideology and seek pragmatic solutions to the country’s economic and social difficulties.Unable to form a government on its own, in June 2024, the ANC convened a Government of National Unity with several other parties. At the core of the grand coalition was the pro-business Democratic Alliance, the second-biggest party and a strong advocate of the Vulindlela-led reforms.Concern that the ANC is abandoning its mission to transform South Africa’s deeply unequal society means that, even now, Vulindlela has to tread softly. “We still believe in the role of a developmental state and that the state has a role to play in the economy,” Dicks says diplomatically. “At the end of the day, what we want to see is competition.”Space for the private sector has been opened up largely through the introduction of market mechanisms rather than through wholesale privatisation. Last August, for example, 11 train companies were awarded concessions to run locomotives on the state-owned rail network, part of a plan to open up vital routes carrying coal, manganese and iron ore to third-party competition.“It’s the intention of the South African government that the rail and port infrastructure should remain state-owned,” says Barbara Creecy, transport minister. “But we need to bring in private sector freight operators.”Decades of neglect, exacerbated by cable theft and vandalism, had cut the amount of freight running on the network’s rails from a peak of 226mn tonnes in 2017-18 to just 152mn tonnes in 2023-24. As a result, South Africa’s miners lost out on the global surge in demand for coal after Russia’s full-scale invasion of Ukraine and booming prices for other commodities more recently..Under Vulindlela, mining companies have even clubbed together to buy spares for locomotives operated by the cash-strapped Transnet. They have also laid on infrared-equipped aerial drones to catch copper cable thieves stripping the network.Creecy says she expects freight levels to recover to more than 170mn tonnes in the 2025/26 financial year.Anglo American, which has lost revenue due to logistics logjams, says Vulindlela has made a big difference on the main iron ore export line running to the coast from the Northern Cape. “We’ve seen a material stabilisation over the last year,” says Duncan Wanblad, chief executive of the London-based mining group. The situation had been in freefall, he adds, “but last year it outperformed our expectations”.Vulindlela has also championed private-sector participation in the running of Durban port, ranked the world’s worst-performing container terminal in 2024.In January, ICTSI, a Manila-based port operator, started a 25-year concession to run and upgrade Pier 2 of Durban port after AP Moller-Maersk, a rival bidder, lost its bid to challenge the tender process in court. The terminal, which handles nearly half of South Africa’s entire container trade, has ceded significant business to rivals in Mozambique.“The transaction is a major step in Transnet’s programme to crowd-in the private sector to bring in global expertise and capital and to improve efficiencies across the organisation’s terminals,” the state-owned company says.Under Vulindlela, private operators are also being encouraged to tender for water supply contracts after years during which municipalities neglected repairs. The idea is to force cash-starved local governments to ringfence water and electricity revenue and plough it back into maintenance rather than siphoning it off. Progress, however, is slow — on water and much else. Helen Zille, the DA chair who is running to be mayor of Johannesburg, recently posted a video showing herself knee-deep in water from a burst mains..Read more:.Coalition government won’t fix past failures: SA private sector to play a bigger role in service delivery.“Vulindlela is a really good initiative,” says Songezo Zibi, leader of Rise Mzansi, a small pro-business party in the coalition government. “My only frustrations are that it’s not fast enough and that political constraints within the ANC limit its potential.”Another example critics cite is snail-like progress in the unbundling of Eskom into three units — generation, transmission and distribution — considered essential by pro-market reformers to improve its long-term performance.Experts estimate South Africa needs to invest about $100bn in generation and $20bn in transmission over the next decade, far beyond Eskom’s capacity. To get private capital flowing, the government is aiming to launch South Africa’s first wholesale electricity market later this year, including open access to the power grid.But Eskom is reluctant to move its grid assets to an independent national transmission company. Ramaphosa has tried to quell business concerns, insisting in his State of the Nation address this month that “a fully independent state-owned transmission entity . . . will have ownership and control of transmission assets”.A recent traffic light-style update on Operation Vulindlela reforms, however, classified Eskom’s restructuring as a discouraging orange: “Reform facing significant challenges, intervention required.”The drive to address the institutional rot that took hold under Zuma faces many other hurdles, including the resistance of organised crime, of “tenderpreneurs” — a businessperson who uses their political contacts to secure contracts — and of politicians and their cronies who profit from existing arrangements.Moeletsi Mbeki, a political analyst and brother of former president Thabo Mbeki, calls Vulindlela a “sticking plaster”. He adds: “They’re tinkering with the old model. It’s not real economic development, not by a long shot.”Still, opposition to more private sector involvement in the economy is waning, says Lawson Naidoo, a lawyer and consultant. “You’ve always had these debates within the ANC going back to the Zuma era of the radical economic transformation component of the ANC that denounces . . . a liberal market economy,” he says. “But that isn’t the dominant view in the ANC, certainly not today.”Steinberg, the historian, says the idea is to make reforms irreversible before Ramaphosa leaves office. Ramaphosa’s tenure as ANC head ends next year and as president of the country no later than 2029.“The question is whether this is peculiar to the Ramaphosa presidency and whether it will evaporate when he’s gone,” he says. “They’re running against the clock and they want these things bedded down and unremovable before they go.”Proponents say reforms will survive because they are delivering results. Even deputy president Paul Mashatile, a possible successor to Ramaphosa who is considered less close to business, tells the FT that he does not oppose the direction of reforms. Privatisation, he says, should no longer be considered “a swear word”.At Vulindlela, Dicks agrees that the task is to make changes stick. “We should work ourselves out of a job,” he says. “You want to get this reform done, tick it off, and never come back to it again.”.© 2026 The Financial Times Ltd.

How world sees SA — FT: The ANC’s sudden embrace of South African business

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