The Business Leadership South Africa Reform Tracker revealed that Delays in regulatory frameworks, slow implementation of market reforms, and uncertainty around private sector participation in ports and rail have all contributed to the drop.
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South Africa’s reform programme continues to make gradual progress, but mounting challenges in freight logistics and stalled governance reforms are raising fresh concerns about the pace and durability of change, according to the latest Business Leadership South Africa (BLSA) Reform Tracker.
The review for the fourth quarter of the 2025/26 financial year, covering January to March 2026 and titled “Moving but Slowing”, shows the overall reform completion index has climbed to 71.75—an increase of 27% since tracking began in March 2024.
However, quarterly momentum has slowed significantly, rising by just 0.4 points, signalling that early gains may be harder to sustain.
The tracker, developed by research consultancy Krutham for BLSA, monitors 245 reform deliverables across key sectors including economic infrastructure, criminal justice and governance.
“South Africa’s reform programme has now been tracked for eight quarters and the overall trajectory remains positive,” said BLSA CEO Busisiwe Mavuso.
However, she warned that structural tensions—particularly in network industries—are beginning to weigh on progress.
The most notable setback came in freight logistics, where the completion index fell by 4% to 69.16, marking the sharpest decline across all categories. Delays in regulatory frameworks, slow implementation of market reforms, and uncertainty around private sector participation in ports and rail have all contributed to the drop.
A major sticking point remains Transnet’s unbundling process, which critics say leaves the State-owned enterprise acting as both operator and regulator while the sector is being opened to competition.
Mavuso noted that this structure creates conflicting incentives.
“This framework explicitly incentivises Eskom and Transnet to put their interests first,” she said. “As such, we have a situation where a State entity might push back, quite rationally from their perspective, against certain reforms.”
Despite these challenges, there have been some positive developments in the sector.
The Economic Regulation of Transport Amendment Act was signed into law in March, and several private train operators are in advanced negotiations to access the rail network. Port reform is also progressing, with the Durban Gateway Terminal now operational and further concession processes underway in Richards Bay and Ngqura.
In the energy sector, reforms showed modest improvement, with the electricity index rising from 67.63 to 69.05.
This was largely driven by President Cyril Ramaphosa’s confirmation that the Transmission System Operator (TSO) will be fully independent and will own transmission assets—overruling earlier proposals that would have kept these assets within Eskom.
While this decision has been welcomed as a step toward market reform, implementation timelines remain uncertain. The planned launch of the South African Wholesale Electricity Market (SAWEM) internal market is expected in June 2026, but full functionality is only anticipated by 2028.
Meanwhile, delays to the Gas Master Plan continue to hold back progress in diversifying the country’s energy mix.
Criminal justice reforms emerged as one of the stronger performers, with the index increasing from 84.05 to 85.77. Improvements were driven by enhanced capacity at the Financial Intelligence Centre and stronger compliance by banks with anti-money laundering and counter-terrorism financing regulations.
In contrast, governance reforms remain the weakest area, with no movement for a second consecutive quarter and an index score of 54.38.
While new legislation enacted shortly after the review period aims to limit political interference in public service appointments, deeper structural concerns persist—particularly the continued power of presidents and premiers to appoint senior officials without independent oversight.
The financial sector stood out as the top performer, with its index rising to 87.96. Key reforms such as the launch of deposit insurance, the implementation of the two-pot retirement system, and the rollout of PayShap have strengthened the regulatory and operational landscape.
Challenges also remain in water and housing. The number of certified wastewater systems has declined, and more than 200 housing projects—valued at approximately R37 billion—remain stalled nationwide. The ongoing backlog in issuing title deeds further highlights systemic inefficiencies.
Looking ahead, several critical milestones are expected in the second quarter of 2026, including the release of the TSO task team report, the launch of the Transport Economic Council, and progress on key water sector reforms.
BUSINESS REPORT