- Operation Vulindlela was set up to unblock economic reforms.
- Of 26 reforms, eight are complete and 11 on track.
- But there are concerns over another five, and two have gone completely off-track.
Operation Vulindlela – the joint delivery unit of the Presidency and National Treasury – which seeks to drive structural economic reforms, says of the 26 reforms it monitors, eight are completed and 11 are on track.
The unit was established in October 2020 to unblock obstacles to microeconomic reforms that government departments and agencies need to implement. There is a wide consensus that SA needs structural reforms to create a better environment to do business if it is to attract investment.
Speaking in a panel discussion on Thursday - hosted by UNU-Wider - Nomvuyo Guma, chief director of microeconomics in the Treasury, said that there were concerns of "implementation challenges" over another five reforms and another two that were off-track and had missed delivery deadlines.
UNU-Wider runs a research programme in SA called SA-Tied, which produces research to inform evidence-based policy.
Included in the eight completed reforms are the lifting of the licensing threshold for distributed or own generation of electricity by companies and mines to 100 MW and the auction of broadband spectrum, which eventually happened last month after several years' delay. The two that have gone most awry are Eskom’s target to reach 70% of energy availability factor (EAF) and the emergency procurement of new-generation power by the mineral resources and energy department.
Eskom’s energy availability factor – the number of plants in good working order and available to dispatch electricity – is sitting at around 62%, with the outlook for the year indicating that this is likely to fall further rather than rise. Emergency energy procurement – known as the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) – first mooted in 2019 and released to the market in August 2020 has run aground with none of the successful bidders yet achieving financial close and one facing ongoing litigation.
Head of the Project Management Unit in the Presidency, Rudi Dicks, said that Operation Vulindlela was not an attempt to take over a department’s functions but "to design an intervention to support implementation". While many Cabinet ministers were initially reluctant to accept intervention, they were now positively supporting reform.
Delivery units are common to results-focused government administrations, many of which are based on the work of James Barber in Tony Blair’s UK administration from 1997 to 2007. When premier of the Western Cape, Helen Zille established a highly effective delivery unit modelled on the UK’s. Guma said that although delivery units were not uncommon, SA had its specific problems to solve.
"[Operation Vulindlela] was meant to solve the failures - like a lack of technical capacity as some reforms are difficult to implement, and a lack of coordination - because when there are two departments involved that just don’t agree on a way forward, there is policy inertia. In the SA context, there is also a challenge of vested interests that further complicate the policy space and deep-seated disagreements at a political level on some of these structural reforms," said Guma.
These were not things that could be easily solved by a government department, which is why Operation Vulindlela was set up as a collaboration between the Presidency and the ministry of finance, she said.
But as the unit has found, even completed tasks require follow-up. The 100-MW reform, while gazetted, is still heavily restricted by red tape, with the National Energy Regulator of SA having imposed onerous conditions for registration not unlike regulations for full licensing - defeating the object of lifting the licensing threshold. Operation Vulindlela has since taken up the challenge to reduce the red tape for registration.