President Cyril Ramaphosa has launched the second phase of Operation Vulindlela to unleash more rapid and inclusive economic growth.
Operation Vulindlela was established in October 2020 as a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms.
In its first phase, the operation focused on reforms in five key areas with a high potential impact on growth and jobs: energy, logistics, telecommunications, water, and the visa system.
35 reform actions were prioritised across these five areas, with government departments and agencies taking responsibility for implementation while a dedicated Vulindlela Unit in the Presidency and National Treasury monitored progress and provided support.
Operation Vulindlela aims to modernise and transform network industries, including electricity, water, transport and digital communications.
The second phase will focus on three key reforms: tackling the legacy of spatial inequality, enhancing local government performance, and accelerating digital transformation.
President Ramaphosa said that this new phase is aimed at driving rapid and inclusive economic growth for the benefit of all South Africans.
“We need growth that is both rapid and inclusive. We need growth that serves the millions of people in our country who remain unemployed, and the young people who cannot see a way into the labour market.
“And we need growth that improves people’s daily lives by fixing the infrastructure that is broken.”
He stressed that if these reforms are implemented swiftly and boldly, they will put South Africa firmly on the path of economic recovery and renewal.
He acknowledged that the process of reform is never easy, and it is often contested, especially by those with vested interests.
“Yet we have a simple choice to make. If we do not reform our economy, it will not grow and we will not create jobs. Unemployment will rise and poverty will increase. On the other hand, if we implement these reforms – if we do so swiftly and boldly – we will place our economy on a path of growth and renewal.”
In his 2025 State of the Nation Address, President Ramaphosa outlined an ambitious economic strategy aimed at pushing South Africa’s annual growth rate beyond 3%. While a similar target was set in 2020, the country has struggled to gain momentum—averaging less than 1% growth over the past decade.
Tackling Spatial Inequality
The second phase will start by addressing the apartheid legacy of spatial inequality, which has forced millions of South Africans to live far from economic opportunity.
The president noted that the country’s urban structure must be reshaped to enable citizens to live closer to where jobs and services are located.
“The poorest South Africans spend as much as 40% of their income on transport to get to work, more than almost any other country in the world. Imagine you earn R10 000 and R4000 of it is spent on transport,” he said.
The government will change housing policies to introduce demand-side subsidies for home ownership and affordable rental options, empowering people to choose where they want to live.
Publicly-owned land and buildings, particularly in inner cities, will be released for affordable housing, and the backlog of title deeds for affordable housing will be cleared.
Reforms will also simplify the titling system, making it more accessible and affordable.
Finally, a comprehensive regulatory review will be undertaken to remove barriers to low-cost housing development and encourage investment in urban centres rather than peripheral areas.
Strengthening Local Government
The second area of reform during this phase of Operation Vulindlela is improving the performance of local government.
The president highlighted that many of the country’s municipalities are unable to deliver basic services to households and businesses.
“Operation Vulindlela has set out a clear agenda for local government reform, which starts with improving the delivery of water and electricity services through professional utilities.
“Utilities should have the right technical skills, strong regulation and oversight, and full control of their billing and revenue functions to allow them to invest in infrastructure and maintenance,” he said.
Another key step is strengthening local government administration.
“We will work to ensure that capable, qualified people are appointed to senior positions in municipalities, such as municipal managers and CFOs,” he said.
This will be done by extending the mandate of the Public Service Commission to local government and taking action against municipalities that fail to comply with minimum competency standards.
Finally, the National Treasury will review the local government fiscal framework, including the design of conditional grants, to ensure that the revenue of municipalities matches their responsibilities.
Accelerating Digital Transformation
Last month, Cabinet approved a Digital Transformation Roadmap to drive the adoption of digital technologies in government and to build digital public infrastructure that can be used by all South Africans.
This will include a digital identity system, rapid payments to expand financial inclusion, and enabling people to access services like applying for an ID or passport online.
The government plans to invest over R940 billion in infrastructure over the next three years, including R375 billion through state-owned enterprises. This investment will target roads, bridges, dams, waterways, ports, and airports to stimulate economic activity and improve service delivery.
The plan is to lift South Africa’s GDP growth to above 3% and create over 800,000 job opportunities in the immediate term.
