2025 positive year for South Africa’s economy with G20 — BLSA

This will be a good year for South Africa’s economy, with the G20 that will be held in the country in November — one of the highlights of 2025 expected to give South Africa the opportunity to showcase its progress.

Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says in her weekly newsletter it will be an interesting year globally and a positive one for South Africa.

“We have an opportunity to consolidate the reforms made in the past several years. Load shedding is behind us and other key structural impediments to our economy, like the logistics crisis, are being addressed. There certainly is still much work to do on reforms to support our economy, but we should start to see the fruits of the work done.”

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Hosting G20 and B20

She says by hosting the G20 this year as well as the B20-associated business event, South Africa will be on show for the developed world’s business and political leaders. “It will offer an opportunity to demonstrate the progress we made and establish in the minds of the world that we are a country heading in the right direction.”

Business has forged ahead with the B20 and appointed a secretariat that is raising the required funding, Mavuso says.

“I will attend the World Economic Forum in Davos next week alongside other business and political leaders, where we will activate our G20 and B20 hosting with international leaders.

“The business community is taking both events seriously to ensure that the country benefits from them, showcasing the progress we have made and the opportunities to do business and invest in South Africa.”

She says a lot of effort will go into making that happen. “A clear strategy to engage world leaders in Davos is a first step, and I am pleased that later this week business and government will meet to ensure alignment.”

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Not all about the G20, reform must also continue

However, she says it is not all about the G20 meeting. “While the G20 is an opportunity we must seize, it is even more important that we ensure the domestic reform agenda continues. Government and business partnerships that entered a second phase late last year will be able to consolidate concluded reforms and continue the important work of ensuring we create economic opportunity as a country.

“I am looking forward to the first business/government bilateral meeting this week with the president and his team. It presents an opportunity to set the agenda for the year ahead. The GNU committed itself to the new phase of the partnership, and we will be working hard to ensure it is productive.”

Mavuso says over the past few months, she noted several times how the GNU is proving positive for business sentiment, as reforms ranging from visas to water infrastructure show notable progress. “It was interesting to see last week that another rating agency, Moody’s, noted this progress in its view of the outlook for South Africa.

“This progress must crowd in greater commitment to further reform, rather than allow us to take our foot off the accelerator. Progress takes time to work its way into real economic activity. While a lot of investment was delayed or cancelled due to load shedding, companies will only now regain the confidence to forge ahead with investment plans based on a new era of stable electricity supply.”

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Still work to do with electricity and logistics

However, she points out, the reforms to consolidate a new electricity system must still be bedded down, including the establishment of a competitive open market for electricity that could start to reverse the constant pattern of above-inflation electricity price increases we experienced for over 15 years.

“We must also accelerate reform in logistics by introducing greater competition by allowing more private sector participants to use Transnet infrastructure in competition with each other.”

Mavuso says business also signalled the importance of placing some focus on local government in the reform effort, as it is clear that local government is increasingly the major choke point in service delivery and the focus point for wider systemic problems like the Eskom municipal debt crisis.

“Municipal service delivery does have clear implications for business, and I noted before the companies that were forced to shut down because they cannot rely on water supply and refuse collection.”

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Local government must be reformed

She says Operation Vulindlela, the joint venture between the Presidency and National Treasury to accelerate reforms, has also signalled the importance of local government reform.

“The ANC’s NEC released its January 8th statement this weekend, and it is pleasing that one of the six priority actions for 2025 is to fix local government and ensuring water and energy security.

“This is a new front for cooperation between business and government that I hope we can make substantial progress on in 2025.

“We will also continue our efforts to support reform of the criminal justice system, with an opportunity this year to escape the Financial Action Task Force (FATF) grey list, which would be another significant positive for business sentiment.”

In addition, Mavuso says the BLSA continues to support the National Prosecuting Authority with resources to enable access to skills for complex case development, while Business Against Crime works to support wider criminal justice system capacity.