I felt a little hesitant about the title of this speech. My father liked to quote the 16th century scholar Desiderius Erasmus, who said “in the land of the blind the one-eyed man is king”. Well, I am not an economist, so can’t even claim to have one eye.

However, I believe this is an enormously important question—one with far-reaching implications for our future—and it is one that I have spent a lot of time thinking about. It has been the central, sustained preoccupation of the Business For South Africa partnership with government, an initiative that approximately 20 business leaders, including myself, have been driving for the past two and a half years.

The dominant narrative today is one of failure and decay. It is mournfully accepted by many that our national decline is inexorable and irreversible, that a failed state is unavoidable, much like other post-liberation countries in Africa. They have lost hope, giving rise to an unfortunate paradox: this very absence of hope actively accelerates the decline, locking us into a negative spiral.

Conversely, if we have indeed turned the corner, and our trajectory is now positive, that could herald the start of a new era of prosperity for our country. If this is true, and investors come to recognise this, it could further spur investment, igniting a powerful virtuous cycle.

I want to use this opportunity to argue that our decline has been arrested, our trajectory is once again positive, and this fact is of profound significance for our future.

Just to be clear, this is not to say our economic picture is suddenly healthy, but has the trajectory changed? In a talk I heard by Michael Sachs a few years ago he made an important comment about South Africa’s national debt. He said the problem with our debt was not so much the absolute level, but the trajectory. Investors think very differently about a situation which is bad, but getting better, from a situation that is bad and getting worse, or even good but getting worse.

THE FIRST 20 YEARS

To make sense of our moment today, we need to see it in the context of our journey over the past 30 years. Oddly, our past economic performance is not well understood. Many do not appreciate the tremendous prosperity experienced in South Africa between 1994 and 2014.

JP Landman usefully reminds us that the most significant economic indicator to keep track of over time is GDP per capita. This measures a country's total economic output divided by the number of people in the country. When this ratio improves, the country becomes more prosperous. There are more jobs and living standards improve. A higher GDP per capita typically correlates with higher household incomes, greater government capacity to provide public services, and improved education, health and life satisfaction. When GDP per capita growth is compounded over long periods of time, the positive consequences for a country are immense.

We saw this in South Africa in the first 20 years of our democracy. The Goldman Sachs’ Two Decades of Freedom report published in 2013 describes the country’s achievements over this period:

• GDP grew annually by an average of 3%. Our GDP rose from R544 billion in 1994 to R4.14 trillion in 2014. Even in US$ our economy trebled in size.
• Despite significant population growth, in real terms there was a 40% increase in GDP per capita from 1994 to 2008.
• Inflation fell from an average of 14% from 1980 to 1994 to 6% from 1994 to 2012.
• Foreign exchange reserves rose from $3bn to $50bn.
• Tax receipts soared from R114bn from 1.7m people in 1994, to R814bn from 13.7m people in 2013.
• Government debt as a percentage of GDP dropped from around 46% in 1994 to a low of 24% in 2008.
• In 1994, South African government bonds were in junk territory. Successive rating agency upgrades from the late 1990s resulted in a rating high of two notches above investment grade in 2011.

What did this economic prosperity mean for South Africans?

• During this period the number of people employed nearly doubled, from 8.9m to 15m.
• 12m people joined the middle class.
• From 2006 to 2011 alone, 4.1m people were lifted out of poverty.
• The growing tax revenues enabled the government to extend the number of social grant beneficiaries from 2.4m to 16.1m people.

This two-decade period was far from perfect, but the economic data is unequivocal. Substantial growth in GDP per capita markedly strengthened the financial and social fabric of our nation.

2014 to 2024

During the ten years after 2014, our economy went backwards. We lost 30% of our GDP per capita gains of the first 20 years. Our country is materially poorer today than it was in 2014. During this decade, our growth dropped to an average of 0.71%, compared to an average of 3.14% from 1994 to 2013.

This disastrous decade saw a dramatic rise in government debt, brought about by massive borrowing, bailouts for State-Owned Enterprises (SOEs), covid, and weak economic growth eroding the tax base. Government debt as a percentage of GDP rose from 43% to 75%. The government's debt burden, measured by the ratio of the interest they need to pay on their debt as a proportion of their revenue, went from a low of 7.5% in 2007 to 21.6% in the 2023/24 fiscal year. Today more than one in every five rand collected in tax revenue goes toward paying interest on our debt. We spend more on servicing debt than we do on education or health.

Until 2024 almost all of our network industries were in steady decline. The network industries are the critical infrastructure sectors that form the backbone of any economy. They include energy, freight rail, ports, transport, communications and water and sanitation. Failing network industries have a profound and cascading negative impact on a country's economy and society.

Eskom, after being voted the best power utility in the world in 2001, showed a steady decline over the decade to 2023. The primary metric used to gauge the operational health and reliability of Eskom's electricity generation is EAF, the Energy Availability Factor. This measures how much electricity is actually supplied by Eskom as a percentage of the total they could supply if all their plants were working optimally.

From a high of 85% in 2011, there was a steady decline in the EAF until 2024. EAF was at an all-time low of 51% in December 2023, brought about by a relentless rise in unplanned outages and under-investment in maintenance. The consequences were devastating. In 2023 we had over 200 days of stages 4–6 loadshedding, and companies were planning for a total blackout, a collapse of the entire grid that would take up to two weeks to revive. It seemed that the proverbial light at the end of the tunnel had literally and figuratively been extinguished.

From a high of around 220mt of freight rail moved in 2014, by 2023 this had plummeted to 149mt. At the ports, container ships had to wait up to 21 days before getting a berth to unload their cargo, with over 60,000 containers stuck at sea.

Over this decade water losses across the country soared. The national average for municipal non-revenue water (NRW)—water that is produced and treated but lost before reaching the consumer (primarily through leaks)—increased sharply, rising from approximately 37% in 2014 to around 47% by 2024. This means nearly half of the country's treated water is currently being wasted, directly driven by a lack of maintenance and investment in aging pipes and systems.

This decline did not escape the notice of the credit rating agencies, and in 2017 Fitch and S&P downgraded South Africa back into junk territory, with Moody’s following in 2020. The downgrades continued and S&P and Fitch now have us three notches below investment grade, and Moody’s two notches below.

Looking at the data at the end of 2023, it was hard, even for me, to find a silver lining.

WAS THIS AN INFLECTION POINT?

Yet a colossal structural transformation of our economy was quietly set in motion by Tito Mboweni in October 2019. He published a National Treasury discussion paper on economic reforms titled: “Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa.”

The paper was a detailed blueprint for structural reforms designed to boost South Africa’s growth potential by an additional 2.3 percentage points over a decade and address declining competitiveness, weak investment and high unemployment. This paper was the genesis for the largest and most significant overhaul of the economy seen since Trevor Manuel’s GEAR of the late 1990s.

The discussion paper advocated for the unbundling and restructuring of Eskom and allowing greater private sector participation in electricity generation. It specifically highlighted the need to move away from state monopolies in key network industries. The backlash in the ANC Alliance was swift and harsh, and Mboweni was forced to apologise for not consulting before publishing the paper.

But as the South African economy was reeling from the covid lockdowns a year later, Mboweni’s ideas were resurrected in the Economic Reconstruction and Recovery Plan (ERRP), which was announced by President Ramaphosa on 15 October 2020.

The pivotal idea of the Treasury paper carried forward to the ERRP was the commitment to overhaul the network industries. The massive infrastructure programme to deal with the energy and logistics crisis proposed by the ERRP would not primarily be funded and implemented by government’s monopoly SOEs, but by the private sector. To achieve this required dismantling the state monopolies, transforming these closed sectors into fully open and competitive systems. This was truly revolutionary; a radical departure from the statist ideology that had hitherto governed the approach to the network industries.

But we have all too often seen great plans gather dust on government shelves.

There were two things that were different this time.

The first, and most important, was that the plan was accompanied by the creation of the Operation Vulindlela team, a joint initiative of The Presidency and National Treasury, to oversee and accelerate the implementation of the plan. The stated goal of Operation Vulindlela was to fast-track structural reforms to modernise and transform network industries, reduce input costs, lower barriers to entry, increase competition and stimulate investment and job creation.

Modelled on presidential delivery units in other countries that had proved so effective at accelerating reform, what was distinctive about Operation Vulindlela was its clear, narrow focus on the most significant binding constraints on economic growth. The OV team was tasked with diagnosing the technical or political obstacles, and intervening to resolve them.

The team rigorously tracked progress on specific, measurable reform targets, and were able to identify and resolve blockages. The importance of the OV team in the successful implementation of the structural reforms over the past five years cannot be overstated.

The second factor that was different this time was a massive mobilisation of business resources, capacity and capability to support Operation Vulindlela and the implementation of the ERRP.

Led by Adrian Gore and Martin Kingston, over 160 CEOs from every sector of the economy, representing R11 trillion of market capitalisation on the JSE and 1.4 million employees, got behind the implementation of the reform agenda. Around 20 CEOs were actively involved, on almost a daily basis, taking responsibility for one of the four workstreams, which included ending loadshedding, fixing our ports and freight rail, addressing crime and corruption and reducing youth unemployment.

I have been one of the co-leads in the Energy Workstream, together with Simon Boloyi from Sasol, Nolitha Fakude from Anglo American and Mike Teke from Seriti. This partnership leveraged off the “collaboration muscle” and experience that was developed during covid, when business mobilised to partner government in the Solidarity Fund and Business for South Africa (B4SA) with great success.

IS THERE EVIDENCE THAT WE HAVE TURNED THE CORNER?

This is all very well and good, but was this yet another false promise of a new beginning, another failed new dawn? What really shifted?

ELECTRICITY

The single most significant, and most palpable, area of improvement has been in electricity supply and energy reform. In 2023, after 10 years of decline, it seemed unimaginable that loadshedding would end a year later. When we began the partnership with government we felt that there would be no intervention more powerful to signal the shift in our trajectory than ending loadshedding. And here we are, having achieved this goal of ending loadshedding faster than any of us thought possible. The country has demonstrably turned the corner on energy security.

A confluence of factors fuelled this success. The most significant were the organisational and management changes brought about by the new leadership team of Mteto Nyati and Dan Marokane. This was supported by the disruption of criminal syndicates by law enforcement agencies, and the intervention by Treasury to enable the contracting of OEMs to repair power stations. These efforts were all bolstered by lower demand and a boom in private rooftop and commercial energy generation. The B4SA business partnership also stepped in with overwhelming support, dedicating over 350 experts supported by more than 50 companies to Eskom’s recovery.

After years of steady decline, and a low of 51%, EAF has improved back into the 60s and now frequently exceeds 70%. South Africa is moving into a position of surplus electricity. This year Eskom recorded their first profit since 2017. The Treasury’s debt relief package contributed to this, but another major factor was a year-on-year saving of R16bn on diesel that they did not need to burn due to the improved EAF.

Whilst everyone has noticed the end of loadshedding, the shift that many have not fully appreciated is the sweeping reform that is transforming the energy market.

The blueprint for eliminating loadshedding—the north star of the energy workstream—was President Ramaphosa’s Energy Action Plan, launched in July 2022. This plan included three components: improve Eskom’s plant performance (i.e., improve EAF), bring as much new generation onto the grid as quickly as possible, and reform the sector to create a modern, competitive market for electricity generation and storage.

In the most significant liberalisation since the late 1990s, in August 2021 the government removed the need to apply for a generation licence from NERSA for private generation projects up to 100 MW, whether connected to the grid or not. The 100 MW threshold was removed entirely in January 2023, and now a privately built generation plant of any size can be built without a licence.

The legal framework for the new market was enacted into law by the President in August 2024, with the promulgation of the Electricity Regulation Amendment Act (ERA)—a watershed moment for the electricity sector. The core purpose of the ERA Act is to dismantle the century-old vertical monopoly of Eskom and transition South Africa to a competitive and open market system.

In accordance with the ERA Act, the National Transmission Company of South Africa (NTCSA), which owns and manages the transmission infrastructure (the wires), has been unbundled from Eskom generation. It will be the market and system operator and enable homes and companies to buy and sell their electricity in an open market.

This is the first time the dynamism and efficiency of the private sector have been brought into a formerly state-controlled, monopolised industry, and this liberalisation is mobilising a colossal wave of private capital toward our nation's electricity infrastructure.

The early expectation was that private investment in generation would be rapidly catalysed through public sector procurement via the Independent Power Producer (IPP) bid windows. However, the IPPs have consistently underperformed.

Fortunately, the slack has been taken up by the private market through new Purchase Power Agreements (PPA) made possible by the removal of the licensing requirements. The pace and scale of PPA projects have exceeded all expectations by at least an order of magnitude.

To put the scale into perspective, consider that Eskom’s total installed capacity is 48 GW, of which they can reliably generate around 30 GW. The latest Eskom grid survey reveals a pipeline of approximately 220 GW of renewables and battery storage under consideration (compared to 134 GW just a year ago). The vast majority of this is at a very early stage.

There has been something akin to a “gold rush”, as developers have opportunistically sought to secure the best land in the country over the past ten years through land option agreements. A developer recently commented:

“I can tell you it is almost impossible to find any site anywhere vaguely decent that has not been signed up under option for a renewables project, with the exception of KZN.”

This is three times the current electricity demand in the country, and although most of it will not be built, it demonstrates the appetite for investment and how quickly the market has reacted to the opportunity.

To get a better sense of what might actually get built, developers have concluded costly environmental impact assessments for 72 GW, and EIA applications are in for an additional 45 GW. There is around 22 GW in the Eskom Grid Budget Quote phase, where significant guarantees have been paid to secure grid access. In the last four years, close to 16 GW of new electricity-generating plants have been registered with NERSA. Based on global average costs of new renewable energy plants, that is more than R400 billion of new investment; this is investment not projected, but either spent, or in the process of being spent, on generation infrastructure.

It is anticipated that the structural reforms in energy and the liberalisation of the electricity market are going to result in over R2 trillion of private investment in generation, storage and transmission over the next ten years.

TRANSPORT AND LOGISTICS

The logistics sector has not quite made the progress we have seen in electricity, but the advances are material.

We have seen a dramatic improvement in the functioning of the ports. From an average waiting period of 21 days for a ship to get a berth to unload cargo in 2023, some of our key bulk-commodity ports are now down to around two days, which is the international benchmark. On the whole, our ports are no longer the constraint they were two years ago on trade.

Like in the electricity sector, the logistics sector is combining a focus on operational improvements in the state-owned enterprise (Transnet) with wholesale reforms. While Transnet is improving the functioning of the ports, the Department of Transport is proceeding with its programme of concessioning the ports. This will bring both significant fixed-capital investment, but also better-performing ports as the expertise and sophisticated systems of global port companies are introduced into our port operations.

A couple of weeks ago, Transnet won their case in the Durban High Court against a challenge to its concessioning of the Durban container port, allowing that deal to go ahead. This will unlock tens of billions of rand of investment in just that port. Concessions are also in progress for the Richards Bay port, which will be a similar investment driver.

Freight-rail volumes have also turned the corner. Whilst far from previous highs, the trajectory is positive. Volumes have increased from 149 mt in 2023 to a projected 171 mt this year. The Department of Transport is also contracting with 11 private-sector rail companies to gain access to 41 Transnet rail routes, which will dramatically boost freight-rail capacity and throughput.

Furthermore, queues of trucks at border crossings have been reduced from 19 km to around 3 km, with the number of trucks processed daily up 13% on 2023.

WATER

One of the early achievements of the Operational Vulindlela team was in the issuing of water licenses. A massive backlog in the issuing of licenses was holding back R50bn of infrastructure projects. Despite the target for 300 days to issue a license, some applicants had been waiting for more than eight years for a water license. This backlog was cleared by mid-2022, and the department now reliably issues water licenses within 90 days.

The department has gone on to begin reshaping how water and sanitation services are managed, after decades of neglect. The playbook is the structural reform of the energy and logistics sectors.

There are existing models that demonstrate the benefits of introducing the efficiency, skills and investment of the private sector into water infrastructure.

For more than 20 years Siza Water in KwaZulu-Natal (KZN) and Silulumanzi in Mpumalanga have been managed by private operators. Recent research by the Bureau for Economic Research (BER) into these private concessions reveals that, whereas public providers lose around half of their water on average, these two private concessions lose just 8%–20%. In addition, instead of the poor revenue collection of around 50% by municipalities, these concessions collect over 95% of what they bill. And they are not just more efficient; they also maintain the highest standards of water quality.

The BER research paper warns that the solution is not wholesale privatisation. There is still an important role for the state to play to finance expansion into low-income underserved communities where the private financing model is not sustainable and services need to be subsidised.

The Department of Water and Sanitation is implementing a strategy along these lines. The National Water and Sanitation Master Plan paves the way for increased private investment in water and sanitation infrastructure. The country is moving from a model where central government directly funds and manages most water infrastructure to one where it leverages private-sector capital and efficiency through Public-Private Partnerships.

The department has established the Water Partnership Office, with the Development Bank of South Africa and the South African Local Government Association, to facilitate, standardise and accelerate the process of municipalities entering into PPPs.

The structural reform in water and sanitation envisaged in the Master Plan seeks to unlock approximately R900 billion in investment. This is the quantum of funding estimated to be required by 2030 to achieve water security, refurbish infrastructure and meet the country's water and sanitation goals.

OTHER REFORMS

In addition to these major structural reform initiatives, Operation Vulindlela has achieved a number of other notable and tangible accomplishments.

They successfully ended a decade-long regulatory deadlock over spectrum allocation. The high-demand spectrum (radio waves necessary for faster data and network expansion) was successfully auctioned off in March 2022 to mobile operators. This secured billions of rands for the fiscus and enabled telecom companies to expand 4G and 5G network coverage, lowering the cost of mobile data.

Operation Vulindlela also accelerated the analogue signal switch-off for certain frequency bands, freeing up more valuable spectrum for mobile broadband.

Another significant achievement of the Operation Vulindlela team has been the overhaul of the visa system. By the end of 2024 most of the work-visa backlog constraining critical skills in the country had been cleared. Following the launch of e-visas in 2022, citizens of 34 countries can now apply for visas in a streamlined online process, cutting down on bureaucracy and providing convenience and speed for travellers.

Significant reforms have also been introduced to the work-visa system to make it easier for employers to access scarce skills. The new Points-Based System (PBS) replaces lengthy discretionary processes with clear, measurable and objective requirements, making the process of applying for a work visa more predictable and easier to manage. Employers also no longer need to undertake the costly and time-consuming process of obtaining a certificate from the Department of Employment and Labour.

For large companies and major investors, the Trusted Employer Scheme (TES) was introduced, under which they are pre-vetted and awarded “trusted employer” status. Companies under the TES benefit from a streamlined, fast-tracked visa process for their foreign employees, reducing paperwork and administrative friction.

The Department of Home Affairs is now also creating a new Digital Nomad Visa to attract high-earning, globally mobile talent into the country.

WHAT IS THE ECONOMIC IMPACT?

As you connect all of these dots, I am sure you are starting to wonder—well, if these reforms are so far advanced and significant investment is being unlocked, why is our economy not doing better? Why is our economic growth so stubbornly low?

At the beginning of 2025 the BER suggested that a committed, sustained pursuit of existing structural reforms under Operation Vulindlela could boost South Africa’s real GDP growth rate up to 3.5% per year by 2029, a boost of around 1.5 percentage points above their baseline forecast. They describe how the reforms drive a positive flywheel. Not only do they mobilise massive private fixed investment, but they lift business confidence and investor sentiment, driving greater capital commitment from the private sector. As Larry Summers always reminded us, “Confidence is the cheapest stimulus.”

While GDP growth has been disappointing this year, this does not, I believe, detract from my hypothesis that our economic trajectory has changed.

In addition to the operational improvements at Eskom and Transnet, and the substantial reforms under way in energy, freight rail, ports, water and sanitation, for the first time in 15 years South Africa has delivered back-to-back primary budget surpluses. This was made possible by stronger revenue performance, expenditure discipline, and a clear framework for debt stabilisation.

Government debt, previously forecast to rise to near 100% of GDP by the rating agencies, is now expected to stabilise below 80% this year and gradually decline thereafter. In addition, the long-dated government debt we have is predominantly rand-denominated (around 90%) and supported by deep domestic capital markets, providing resilience against external shocks.

Business activity and investor sentiment are beginning to improve. The South African Chamber of Commerce and Industry Business Confidence Index is above 3-year and 5-year averages. Corporate lending has risen 8.3% year-on-year across key sectors of reform, including energy, logistics, and water projects. There has been R129 billion in bond net inflows this year alone, and equity markets have re-rated strongly.

Since the establishment of the Government of National Unity (GNU) in May last year, the JSE Top 40 Index has surged by approximately 58% in USD terms, outperforming both the MSCI Emerging Markets Index and the MSCI World Index. This robust, broad-based rally is creating a strong pipeline for new listings and investment deals.

Importantly, the fiscal and monetary policy framework underpinning this momentum remains among the most credible in emerging markets. Inflation has reduced from a high of 7.8% in 2022 to 3.4% in September, within a strengthened inflation-targeting regime, and the price the government needs to pay to borrow is falling, despite global volatility. The South African Reserve Bank continues to anchor expectations with transparent and proactive policy, complementing Treasury’s conservative budgeting.

Governance indicators have also improved materially. Our core governance strengths—our constitutional framework, independent judiciary, and respected and independent Reserve Bank—continue to be resilient. To add to this is the significant achievement of South Africa’s exit from the FATF grey list, beating the median exit time.

The GNU has also proved both durable and pragmatic. The coalition’s focus on centrist, rules-based governance has reinforced policy credibility and institutional stability.

Although growth has been disappointing, the consensus is that it will improve. The Bank of America, commenting recently on our disappointing GDP growth number, said they believe that a catch-up is likely in the medium term. They said:

“Economic reforms are encouraging, and financial markets appear to view South Africa favourably. Bond yields are lower and credit default swap spreads are at their tightest levels since pre-pandemic, responding to an improving Eskom, Transnet private participation, SARB’s move to a 3% target and likely fiscal improvements.”

The Bank noted that a near-term fiscal improvement could herald the start of an upward trend in credit rating. They continued:

“The country has a firm grip on expenditure, and the pace of revenue collection is high, suggesting fiscal improvements. The fiscal outlook is even more positive from 2026, once Eskom financing is largely completed and headline deficits of less than 4% of GDP support large primary surpluses that should put debt-to-GDP back on a downward trend. Our best-case scenario would be two-notch upgrades at Fitch and S&P and one notch at Moody’s within three or four years, taking us to the 2029 election. Another smooth transition in 2029 could strengthen governance and reform momentum, laying the path for a return to investment grade.”

The BER projects GDP to rise to 1.5% next year and 1.7% in 2027. Whilst this gets us ahead of our average annual population growth of 1.4%, and the country will start to become more prosperous again, it is a far cry from the consistent 3% growth we need.

Although our trajectory has changed, which is noteworthy and significant, we must acknowledge that the flywheel is not yet spinning. Like a flywheel, there is massive inertia in the complex and low-growth South African economy that requires enormous effort to overcome. After the years of decline, it requires tremendous effort to build confidence and stimulate investment. Predictably, there is also a lag time between putting in the effort, in the form of network-industry improvements and the structural reforms, and the confidence and capital-spending boost that in turn accelerates growth.

However, when the flywheel starts spinning, confidence, growth, state finances, service delivery, job creation and national prosperity will become a self-sustaining positive feedback loop.

HOW DO WE SUSTAIN THE MOMENTUM?

Our work is far from over. Before I conclude, I would like to identify the linchpin issues upon which our positive trajectory depends. These issues will determine if we are able to accelerate, or at least sustain, this hard-won momentum.

Above all, the structural reform momentum in our network industries must not be allowed to dissipate. Arguably, the easy part is behind us. The severity of the electricity and logistics crises was existential, and that very urgency helped force difficult decisions. We cannot, however, allow the current stability to breed complacency; the hardest part of the reform journey begins now, with the detailed, grinding work of sustained execution.

To take one example, despite the incredible pipeline of investment in renewable electricity generation and storage, with strong growth in the next few years, we are seeing a decline from 2028 onwards, due to a lack of grid availability, the perceived role of Eskom as player and referee and concern about a slowing in the pace of the reforms. Most energy models converge on the need for a build rate of renewables of 3.5 to 4 GW per year for the next 10 years, so we cannot allow momentum to stall if we are to avoid loadshedding returning in the medium term.

While the reform agenda is accelerated, the operational improvements in the SOEs, in Eskom and Transnet in particular, must be sustained and enhanced. It is not possible for the transition to competitive open markets in the network industries to succeed if the improvements in the SOEs do not continue, or if they continue to absorb significant state resources.

I have not yet touched on the issue of crime and corruption in this speech, despite it being one of the four focus areas in the business partnership with Operation Vulindlela, and arguably more urgent than any other issue we face. The reason I have not focused on it is that I have chosen instead to focus on the issues that have positively impacted our economic trajectory.

However, it is clear that organised crime is nothing less than the new face of State Capture, and presents a threat as existential to our democracy and institutions as State Capture under Zuma did, perhaps even more so. Dealing with this pervasive menace demands the same level of national mobilisation and unwavering focus from politicians, business and civil society that we marshalled to defeat State Capture.

The other issue that is critical, and is beginning to receive attention, is the dysfunction of most local governments. Local government is perhaps the most important service delivery arm of government, and the reforms, particularly in electricity, water and sanitation, depend on functional local government. Operation Vulindlela Phase 2 has local government as a priority, focused on institutional, governance and financial reforms to address the root causes of deteriorating performance. If there is only one city we focus on turning around, it must be Johannesburg. It is the epicentre of our economy, and further infrastructure decay will jeopardise our recovery.

Arguably the most urgent reform, although it will only bear fruit in the medium to long term, is the professionalisation of the civil service. There is nothing that has devastated state capacity and service delivery like the politicisation of the civil service, the deployment of senior civil servants who are either compromised or ill-equipped for the roles they occupy, and the massive turnover and vacancies that exist at senior levels of the civil service. It is simply not possible for any organisation, whether a business, an NGO or government department, to perform with the vacancies and leadership interference, turmoil and instability we see across almost all government departments. Fortunately, all the parties to the GNU, including the ANC, recognise this, and the Public Service Amendment Bill going through Parliament right now will professionalise national and provincial government departments. This single piece of legislation may well prove to be the most crucial institutional reform enacted in our lifetimes.

Finally, we all know that, in the end, politics trumps everything. The progress that we have witnessed over the past few years has been possible because the centre has held, it has held in the ANC, where the President has been able to get support for his reform agenda, and it has held in the GNU. Whilst there is a lot of noise about personality clashes and disagreements in the GNU, of which there are many, on the structural reforms I have discussed this evening and steps that are needed to rebuild our economy there is almost complete agreement.

It goes without saying that the positive trajectory that we are on depends on the political centre holding. A swing to populism in the ANC, or a collapse of the GNU that ushers in a populist coalition, will be catastrophic.

My wife Dominique often accuses me of being an incurable, somewhat naïve optimist. I am by nature an optimist, but I also believe a positive disposition is a necessary mindset to contribute to shaping a better future for our country. It is not that the pessimists and detractors are wrong, but pessimism is the bedfellow of fatalism, defeatism and passivity.

Thomas Friedman captured this when he said:

“Pessimists are usually right and optimists are usually wrong, but all the great changes have been accomplished by optimists.”

Adrian Gore has spoken frequently about how South Africans are particularly prone to “declinism bias”. The term was coined by the German historian Oswald Spengler in his book The Decline of the West. In the “declinism” cognitive bias, individuals view the past more favourably than the future and believe that society, culture or civilisation is in decline.

There is a clear explanation for this phenomenon in biological evolution: our survival instinct required us to prioritise the negative, always scanning for threats that could harm us. This is precisely why the media feeds us a steady diet of bad news—because we are biologically wired to give it more attention.

What is more, when we approach the world with a negative mindset, we are more likely to seek out information that validates that fear. This is called confirmation bias, and it locks us into a vicious, self-fulfilling cycle of determinism that prevents us from seeing positive patterns or the new opportunities emerging.

Since we do not need to have the same survival instinct when thinking of the past, positive memories are more likely to be remembered. The contrast of our negative view of the present with our positive view of the past results in “declinism”, where we believe that things are getting worse and worse.

Even when we strive to assess our circumstances objectively, the fact is that our brains still operate subjectively. Our immediate emotions—those currently skewed by the negativity bias—carry disproportionately more weight than our past emotional experiences. This present bias leads us to conclude that current conditions are worse than they truly are, and, critically, that this downward trend is fated to continue.

It is vital that we overcome negativity and “declinism”, and recognise the great strides that we have made that have created a positive trajectory for our economy. The frog does not recognise the rising temperature until it is boiling, but it seems the reverse is also true. We need to recognise that not only are some of our most intractable problems solvable, but we are solving them.

To conclude, after a decade of decline, South Africa has turned the corner. Our economic trajectory is once again positive and improving. The structural reforms, which have not received the attention and recognition they deserve, are fundamentally transforming our economy and have unleashed an unprecedented wave of investment into the network industries. If sustained, they will be the impetus to start spinning our economic flywheel, unleashing a virtuous cycle of confidence and investment and accelerating economic activity that will drive prosperity for decades to come.

We have collectively achieved what was considered impossible—reversing years of economic decline. But the path ahead requires persistence, purpose, and every hand on deck. It brings to mind the call of President Jan Brand, well known and much admired by my Free State family: Alles sal reg kom as elkeensypligdoen.

Our task now is to focus with unwavering resolve, to safeguard these hard-won gains, and to complete the structural reforms necessary to build the foundation for durable prosperity for all South Africans.