The second phase of Operation Vulindlela, will focus on three key reforms: tackling the legacy of spatial inequality, enhancing local government performance, and accelerating digital transformation.
Launching the next phase of this important initiative at the Union Buildings, on Wednesday, 7 May 2025, President Cyril Ramaphosa emphasised that this new phase is aimed at driving rapid and inclusive economic growth for the benefit of all South Africans.
“We need growth that is both rapid and inclusive. We need growth that serves the millions of people in our country who remain unemployed, and the young people who cannot see a way into the labour market.
“And we need growth that improves people’s daily lives by fixing the infrastructure that is broken. That is why, in the next phase of Operation Vulindlela that we are launching today, we will implement reforms in three new areas,” the President said.
He stressed that if these reforms are implemented swiftly and boldly, they will put South Africa firmly on the path of economic recovery and renewal.
He acknowledged that the process of reform is never easy, and it is often contested, especially by those with vested interests.
“Yet we have a simple choice to make. If we do not reform our economy, it will not grow and we will not create jobs. Unemployment will rise and poverty will increase. On the other hand, if we implement these reforms – if we do so swiftly and boldly – we will place our economy on a path of growth and renewal.
“There is a generation of South Africans that does not know what it is to live in a country that is growing. They have never experienced rising incomes, increasing jobs, thriving businesses and expanding opportunities.
“It is our intention to ensure that every South African feels the benefits of rapid, sustained and inclusive economic growth,” he said.
The first focus area: Tackling Spatial Inequality
The second phase will start by addressing the apartheid legacy of spatial inequality, which has forced millions of South Africans to live far from economic opportunity.
The President noted that the country’s urban structure must be reshaped to enable citizens to live closer to where jobs and services are located.
“The poorest South Africans spend as much as 40 percent of their income on transport to get to work, more than almost any other country in the world. Imagine you earn R10 000 and R4000 of it is spent on transport,” he said.
He emphasised that the structure of the country’s cities has to change to enable people to access work.
To address this, government will change housing policies to introduce demand-side subsidies for home ownership and affordable rental options, empowering people to choose where they want to live.
“While the millions of homes that we have built since 1994 have given families shelter and dignity at an unprecedented scale, we cannot continue to build houses on the periphery of our cities and towns.”
Publicly-owned land and buildings, particularly in inner cities, will be released for affordable housing, and the backlog of title deeds for affordable housing will be cleared.
Reforms will also simplify the titling system, making it more accessible and affordable.
The President added that this will turn houses into an asset for poor households. It will enable these households to access credit and use this asset to advance themselves.
Finally, a comprehensive regulatory review will be undertaken to remove barriers to low-cost housing development and encourage investment in urban centres rather than peripheral areas.
“These reforms will help turn our cities and towns into thriving centres of economic activity,” he said.
The second focus area: Strengthening Local Government
The second area of reform during this phase of Operation Vulindlela is improving the performance of local government.
The President highlighted that many of the country’s municipalities are unable to deliver basic services to households and businesses.
“Operation Vulindlela has set out a clear agenda for local government reform, which starts with improving the delivery of water and electricity services through professional utilities.
“Utilities should have the right technical skills, strong regulation and oversight, and full control of their billing and revenue functions to allow them to invest in infrastructure and maintenance,” he said.
Another key step is strengthening local government administration.
“We will work to ensure that capable, qualified people are appointed to senior positions in municipalities, such as municipal managers and CFOs,” he said.
This will be done by extending the mandate of the Public Service Commission to local government and taking action against municipalities that fail to comply with minimum competency standards.
The Minister of Cooperative Governance and Traditional Affairs has initiated the process to update the White Paper on Local Government, which includes a review of the institutional structure of local government.
Finally, the National Treasury will review the local government fiscal framework, including the design of conditional grants, to ensure that the revenue of municipalities matches their responsibilities.
The third focus area: Accelerating Digital Transformation
The third new area of focus is digital transformation.
Last month, Cabinet approved a Digital Transformation Roadmap to drive the adoption of digital technologies in government and to build digital public infrastructure that can be used by all South Africans.
This will include a digital identity system, rapid payments to expand financial inclusion, and enabling people to access services like applying for an ID or passport online.
“We have established significant momentum. We have seen the green shoots of recovery. It is our responsibility to grow a flourishing crop and to ensure that all South Africans reap the benefits of its harvest,” he said.
Successes of the first phase of Operation Vulindlela
Operation Vulindlela was established in October 2020 as a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms.
It was initiated in the aftermath of the COVID-19 pandemic and its devastating economic impact on the country and around the world.
In its first phase, Operation Vulindlela focused on reforms in five key areas namely energy, logistics, telecommunications, water, and the visa system.
“The pandemic arrived just as the country was emerging from more than a decade of stagnant economic growth and rising unemployment and from the era of state capture.
“When I addressed a joint sitting of Parliament in October 2020, I said in the aftermath of a fire, green shoots begin to emerge. The ashes enrich the soil, and new life takes root to replace what was lost. Over the past four years, we have seen the green shoots of economic reform,” the President said.
Through far-reaching reforms in the electricity sector, government has substantially reduced the severity and frequency of load shedding, relieving a constraint on growth which had strangled the economy for years.
These reforms have enabled private investment in energy generation, unlocking billions of Rands in new investment in renewable energy in every part of the country.
The country has also embarked on a major reform of its ports and rail system through the Freight Logistics Roadmap.
Major successes include the opening of the rail network to competition and the invitation of private sector participation in port terminals, while ensuring that the network infrastructure remains state owned.
The completion of the spectrum auction enabled significant investment in telecommunications infrastructure while improving network quality and reducing data costs for every South African.
The water use license system, which once served as a barrier to investment, now works efficiently and has allowed projects in forestry, mining and other sectors to proceed.
As of last year, the country has implemented an entirely new framework for skilled visas to attract investment and encourage businesses to establish themselves in our country and create jobs.
“All of this progress has been made possible thanks to the cooperation and commitment of the relevant government departments, state owned enterprises, public entities and social partners.
“I commend in particular, the Ministers, Deputy Ministers, Directors-General and CEOs that have provided leadership to these efforts. Over the last four years, Operation Vulindlela has become a government-wide initiative. This is meaningful progress and it will enable higher growth in the years to come,” the President said. – SAnews.gov.za
