Deputy Finance Minister Highlights Operation Vulindlela’s Role in Driving Reforms

Launched in October 2020, Operation Vulindlela was established to address deep-rooted structural constraints that had long suppressed economic growth.

Deputy Minister of Finance Ashor Sarupen has underscored the vital role of structural policy reforms in unlocking South Africa's economic potential and improving service delivery. Speaking at the launch of the Business Leadership South Africa (BLSA) Reform Tracker on Friday, Sarupen reflected on the progress of Operation Vulindlela (OV) — a joint initiative of the Presidency and National Treasury — and outlined the next phase of the country's reform journey.

Diagnosing South Africa's Growth Challenge

Launched in October 2020, Operation Vulindlela was established to address deep-rooted structural constraints that had long suppressed economic growth. "Our starting point was a clear and deliberate diagnosis," Sarupen explained. "We undertook a root-cause analysis of why our growth had remained stubbornly low for over a decade."

The study identified several binding constraints that were undermining investment, limiting competitiveness, and stifling productivity. The conclusion was straightforward: if South Africa could address these issues head-on, it could unlock significant private sector investment, boost job creation, and shift the economy onto a more inclusive and sustainable growth trajectory.

The BLSA Reform Tracker: A New Accountability Tool

The BLSA Reform Tracker — launched during the same event — is designed to monitor and assess government reforms that influence the business environment and economic performance. It evaluates nearly 240 reform deliverables in criminal justice, governance, and economic reforms, rating each quarterly as either on track, facing challenges, or encountering serious obstacles.

This independent monitoring tool is expected to complement Operation Vulindlela's own public reporting, adding transparency and accountability to the reform process.

Phase I: Targeted High-Impact Reforms

Operation Vulindlela's first phase targeted five priority areas identified through economic analysis as critical to breaking the low-growth cycle:

1. Energy security and electricity market reform – The removal of the licensing threshold for embedded generation enabled over 14,000 MW of private power projects to register with the National Energy Regulator of South Africa (NERSA).

2. Freight logistics reform – Third-party access to the rail network was initiated, alongside port reforms to improve efficiency.

3. Water-use licensing and bulk water infrastructure delivery – Licensing turnaround times were cut from more than 300 days to under 90 days.

4. Telecommunications spectrum release and modernisation – The long-delayed high-demand spectrum auction was completed, paving the way for lower data costs and expanded network coverage.

5. Visa regime reform – A new points-based system for critical skills visas was introduced, along with digitised application processes.

"These were not chosen at random," Sarupen noted. "Weaknesses in these areas were central to South Africa's low growth trap."

Phase II: Deepening and Expanding Reform

With Phase I concluded, the government has now embarked on Phase II, approved by Cabinet in March 2025. This stage deepens reforms in the original priority areas while expanding into new ones:

• Local government capacity and basic service delivery – Addressing governance and skills challenges in municipalities.

• Spatial integration and housing delivery – Promoting inclusive urban development and access to affordable housing.

• Digital public infrastructure – Leveraging technology for efficient public services and improved citizen access.

The focus remains on aligning capacity, resources, and accountability while maintaining political momentum. "This is the hard work of reform," Sarupen said, stressing the need for persistent collaboration between departments, the Presidency, National Treasury, and private sector partners.

Economic Impact and Long-Term Goals

Research by the Bureau for Economic Research suggests that fully implementing Phase I reforms could lift South Africa's potential GDP growth rate by 1.5 percentage points above the baseline of around 2 percent. Treasury is currently modelling the potential combined effect of Phase II reforms on growth, investment, and employment.

Sarupen stressed that sustained commitment is essential: "The reforms we are implementing now will define our economic trajectory for the next decade. They demand persistence, collaboration, and an unwavering focus on outcomes."

He described Operation Vulindlela as a pragmatic, data-driven vehicle for reform, designed to clear bottlenecks, accelerate delivery, and ultimately unlock growth that benefits all South Africans.