Government’s plan to save South Africa – including changes for visas, businesses, and reducing load shedding

National Treasury has published its updated ‘Operation Vulindlela’ plan, detailing the government’s strategy to boost the economy after the Covid-19 pandemic.

First announced by president Cyril Ramaphosa in parliament in October 2020, Operation Vulindlela is a joint initiative of the Presidency and National Treasury.

It is a government-wide approach through which ministers, departments and entities implement structural reforms – and a Vulindlela unit in the Presidency and National Treasury monitors progress and actively supports implementation.

Its aim is to fast-track the implementation of high-impact reforms, addressing obstacles or delays to ensure execution on policy commitments.

“The implementation of structural reforms is crucial to sustain our economic recovery and to address the underlying causes of low economic growth and high unemployment,” the document states.

“Many of these reforms have been delayed for a number of reasons, but their urgency is increased by the need to support a swift economic recovery.”

Dedicated capacity for Operation Vulindlela has been created in the Project Management Office (PMO) in The Presidency as well as in National Treasury.

The Vulindlela unit reports directly to the president as well as to the Department of Finance, and provides updates to Cabinet and the National Economic Recovery Council on a regular basis.

The plan indicates that Operation Vulindlela supports the implementation of reforms in three ways:

• Monitoring and reporting on progress to identify challenges, sustain momentum and ensure accountability;
• Facilitating technical support to enable the implementation of reforms;
• Providing recommendations to the President and Cabinet where a decision or agreement is required.

Some of the key reforms outlined in the report are detailed below.

Electricity 

Eskom faces an immediate electricity supply shortage of between 2,000 MW and 3,000 MW according to the IRP 2019, although the actual shortage may be as high as 5,000 MW given a reduced Energy Availability Factor (EAF).

Operation Vulindlela is working with the Department of Mineral Resources and Energy to establish additional generation capacity as quickly as possible to reduce the risk of load shedding and enable economic growth.

The procurement of 2,000 MW of emergency generation capacity will be followed by the implementation of two further bid windows of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

In the short term, the licensing threshold for embedded generation projects will be raised to enable new private investment in generation capacity.

Finally, following amendments to the Electricity Regulations on New Generation Capacity in October 2020, steps will be taken to facilitate the procurement of power by municipalities from independent power producers.

Eskom is also undertaking an intensive maintenance programme on its coal-fired plants to improve their performance, with the current high levels of maintenance expected to have a positive impact on load shedding during the latter half of 2021.

Operation Vulindlela is working with a range of government departments to put in place a comprehensive support programme for the turnaround of municipal electricity distribution businesses, starting in the metros.

Communications 

Icasa is preparing to auction high demand spectrum in the 700Mhz, 800Mhz and 2.6Ghz frequency ranges.

These bands are known as the “digital dividend” as they allow signals to travel over a longer distance, resulting in fewer transmission towers and base stations being required.

The auction of spectrum is likely to reduce the cost of mobile broadband and improve network quality while raising revenue for the state.

While this was originally scheduled to take place by the end of March 2021, this process has been delayed due to a legal battle between Telkom and Icasa.

The migration from analogue to digital signal is necessary to free up additional spectrum for mobile telecommunications. At present, the analogue television signal occupies much of the highly valuable 700MHz and 800MHz frequency bands.

The switch-off of analogue transmission towers will begin in March 2021 and continue over a period of twelve months.

Low-income households will be provided with a set-top box or a voucher to subsidise its purchase to ensure that they do not lose access to digital broadcasts.

Operation Vulindlela is also working with municipalities and provinces to streamline the approval of wayleaves and expand the delivery of broadband and fibre infrastructure to low-income neighbourhoods.

Transport 

Operation Vulindlela is working with the Departments of Transport and Public Enterprises as well as Transnet to ensure that corporatisation of the National Ports Authority is implemented in a manner that protects Transnet’s financial position and operational performance.

Reducing costs and improving the efficiency of South Africa’s ports is seen as crucial to the competitiveness of our exports and the overall functioning of the economy.

Operation Vulindlela is also working with the Department of Public Enterprises and Transnet Freight Rail (TFR) to implement the commercial separation of operations and rail infrastructure, which will enable third-party access to the freight rail network and the accurate costing of slots for third-party operators.

In addition, TFR will invest together with the private sector to ensure the viability of branch lines, and is developing enabling policies and access regimes for branch line operators to operate on TFR lines.

A draft White Paper on National Rail Policy comprehensively further sets out the government’s remedial interventions to achieve a ‘rail renaissance’ in the country, to make rail a competitive mode of freight and commuter transport.

Visas

South Africa’s approach to critical skills and general work visas should be designed to attract the skills that are needed for the economy to grow, and to compete for these skills in a globally competitive market.

In addition to the publication of a revised critical skills list, which was released for public comment in February 2021, Operation Vulindlela is supporting a comprehensive review of the framework and processes for issuing work permits.

An e-Visa system will also be fully implemented in 2021 following its pilot in 2020.

Operation Vulindlela is working with the Department of Home Affairs to expand visa waivers and to explore the feasibility of introducing a visa recognition programme, which would allow travellers with a valid visa from other recognised countries to enter South Africa.

Read: South Africa needs to vaccinate 140,000 people daily to meet target