Private sector steps up as SA reaches a critical juncture

At first glance, South Africa’s headlines offer little cause for optimism. But beneath the surface, a subtle and positive shift is underway. The country’s private sector is no longer waiting for the government to resolve deep-rooted challenges. It is acting, deliberately and across critical sectors, simply because the cost of inaction has become too high. From a foreign investment perspective, SA Inc. can only but benefit. For international investors, this could present a pragmatic opportunity: a market where private enterprise is increasingly shaping the operating environment, creating pockets of stability, innovation, and growth despite broader uncertainty.
 
From energy and logistics to urban infrastructure and institutional support, businesses are stepping in where the state is struggling to deliver. This shift was clearly reflected at this year’s RMB Morgan Stanley Off Piste Conference, which served as a useful barometer of sentiment. KRIS attended, and feedback from clients and companies was consistent: interest in South Africa remains high, and engagement was intense. Meetings were full, discussions focused, and while no one declared a turning point, there was a growing sense that momentum may finally be shifting.

The rationale for business involvement is clear. When ports stall, goods don’t move. When the grid collapses, production halts. When cities decay, talent and capital leave. And when confidence in public institutions deteriorates, investment follows. Increasingly, business leaders are acknowledging that the cost of disengagement outweighs the cost of intervention. Progress may be slower than many would like, but it is happening, and that, in itself, marks a shift.

One of the clearest signals of structural change came this month when Investec became the first South African bank to receive an energy trading licence. This milestone allows the institution to buy and sell electricity on behalf of clients, paving the way for a more open and competitive energy market. At the same time, large-scale renewable projects are gaining traction. A R30 billion mega wind farm has been approved in the Karoo, with turbines reportedly 100 metres taller than Joburg’s Ponte Tower! 

Speaking of Joburg, once the country’s economic powerhouse, the city is becoming a focal point for business-led intervention, with Business for South Africa (B4SA)* stepping in to help. Infrastructure degradation, service delivery failures, and governance instability have made it a risk factor in its own right. In response, companies are stepping in: repairing roads, restoring power, and stabilising basic services. As Discovery’s CEO and one of the leads on B4SA, Adrian Gore, put it, “We’ve filled potholes, restored power, and rebuilt systems. This stuff is doable. We just need to scale it.” Notably, this is not the first time B4SA has come to the aid of the government – it also played a critical role in helping to resolve both the nation’s load shedding and logistics crisis.

Also encouraging is that parts of the public sector, at least, are beginning to re-engage constructively. At Transnet, the implementation of its recovery strategy, including opening key infrastructure projects to private capital, is a positive start. Transnet CEO Michelle Phillips recently outlined a R125 billion plan to modernise operations, including upgrades to the Richards Bay dry bulk terminal and the Ngqura manganese export facility. Transnet Port Terminals (TPT) has also just entered into a 10-year partnership agreement with mining and materials handling equipment company Liebherr to modernise and improve the efficiency of South Africa’s port operations. While reform remains uneven, the willingness to collaborate with the private sector marks a welcome departure from past practice.

Still, South Africa remains on a knife-edge. It’s widely acknowledged that even modest improvements in growth, just one or two percentage points, could materially shift the country’s trajectory. That would mean more jobs, more investment, and greater fiscal headroom.

But to attract and retain investment, South Africa must show visible progress in areas that underpin economic stability: working critical infrastructure, functional cities, a reliable energy grid, and safe, stable environments. When businesses take an active role in driving reform and delivery, it signals institutional capability and commitment, which is what investors look for. These efforts won’t resolve all systemic challenges, but they can contribute meaningfully to a more predictable and investable environment.

What’s gradually emerging is not a replacement of the state, but a recalibration of roles. The private sector brings four critical advantages: the ability to act quickly in response to operational risk; access to deep technical and managerial expertise; a culture of delivery, measurement, and accountability; and the capital and footprint to drive change at a national level. This is not a political gambit but rather a pragmatic response to systemic pressure. And while it’s not a solution to all of South Africa’s challenges, it is a start. And in a context where even small gains matter, that start is significant.

* Several online publications have recently featured articles and editorials on B4SA’s intentions for Johannesburg, including Currency News and this article from News24: Business eyes Joburg for intervention after success at Eskom and Transnet | News24

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