- Overall reform completion index declines to 71.5, first quarterly drop since tracking began.
- Electricity reforms weaken amid curtailment disputes and delays in market restructuring.
- Governance shows modest improvement while logistics reform constrained by policy and funding concerns.
South Africa’s reform momentum has slowed, with the latest Business Leadership South Africa Reform Tracker showing a slight decline in overall progress as challenges in the energy and freight logistics sectors begin to weigh on implementation.
The fourth quarterly review, covering April to June 2026, shows the reform completion index easing to 71.5 from 71.7 in the previous quarter, although it remains 26% above the March 2024 baseline. This marks the first time since the tracker was launched that more reforms have declined than improved.
The tracker, developed by Krutham for Business Leadership South Africa, assesses 247 reform deliverables across economic, governance, and criminal justice sectors. Of the 172 comparable deliverables this quarter, 33 changed score, with 13 improving and 20 declining.
According to BLSA CEO Busisiwe Mavuso, the shift signals emerging strain in key reform areas, particularly in electricity.
The electricity reform index declined from 69.1 to 67.5, a drop of 2.2%, despite improved operational performance at Eskom. The utility expects no load shedding this winter and reports surplus capacity exceeding 5 GW, supported by better plant reliability and lower demand.
However, these gains have been offset by increased curtailment of renewable independent power producers, resulting in a compensation backlog of R2bn and revenue shortfalls of about 9% for some producers. Delays in finalising virtual wheeling trading rules also impacted progress, with the score for this deliverable falling sharply after missing an April deadline.
Structural challenges remain significant. Municipal debt to Eskom has exceeded R114bn, while transmission expansion fell short of targets, with 270.8 km completed against a planned 423 km. Timelines for both the South African Wholesale Electricity Market and the Independent Transmission System Operator remain under pressure.
In freight logistics, the index edged down 0.5% to 68.8. Progress included the signing of rail access agreements between Transnet’s Rail Infrastructure Manager and 11 private train operators, expanding the network to 12 operators and supporting an estimated 24 Mt in additional annual freight capacity. The Durban Container Terminal Pier 2 concession also reached financial close.
Despite these developments, broader concerns about investment viability persist. The National Rail Bill was not tabled during the quarter, and rolling stock shortages continue to constrain growth. The release of a request for proposals for a rolling stock leasing company in June provided some positive movement.
The reform tracker also expanded to include new focus areas. The Synthetic Financial Centre, aimed at enabling domestic management of foreign currency funds, entered with a score of 31.25. A new transport reform category was introduced through Road Accident Fund reforms.
Some areas recorded stronger performance. Visa reforms improved from 83.4 to 86.1, supported by progress in the Electronic Travel Authorisation system. Other infrastructure rose from 75.0 to 80.0, driven by developments in Deeds Office digitalisation.
Governance was the only pillar to record overall improvement, increasing from 54.4 to 55.1. Key progress followed the implementation of the Public Service Amendment Act, which decentralises administrative authority to department heads. The associated deliverable recorded a 20% increase in score.
Further movement in governance includes the publication of a revised White Paper on Local Government for public comment, marking the first major update since 1998.
Criminal justice reforms remained broadly stable, with the index slightly declining from 84.8 to 84.2. The Extradition Bill progressed modestly following its introduction to Parliament in May, while the Protected Disclosures Bill remains under review.
BLSA has raised concern that critical reforms in energy and logistics are encountering growing obstacles. While operational improvements at Transnet are noted, the entity continues to control key processes that are intended to open the network to competition, including tariff setting ahead of the establishment of the Transport Economic Regulator.
Delays in establishing an Independent Transmission System Operator also present a significant risk to the development of a competitive electricity market. At the same time, mounting financial obligations linked to renewable energy curtailment are adding pressure to the sector.
BLSA emphasises that effective implementation of reforms in energy, transport, water, and municipal services is essential to unlock stronger economic growth and address structural challenges such as high unemployment.
Author: Bryan Groenendaal
