Operation Vulindlela
By Thabo Mosia
Energy, logistics, water, and digital sectors see major improvements under reform initiative
The Minister of Finance, Enoch Godongwana, has emphasized the significant progress made under Operation Vulindlela, a collaborative initiative between the National Treasury and the Presidency aimed at accelerating structural economic reforms. Since its launch in 2020, the programme has played a pivotal role in resolving economic bottlenecks and ensuring sustainable growth.
Presenting his Budget Speech on 13 March 2025, Minister Godongwana detailed how the reforms have helped stabilize key economic sectors, created a pipeline of investment-ready projects, and contributed to reducing barriers to doing business in South Africa.
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Key Achievements of Operation Vulindlela
Operation Vulindlela focuses on five critical areas that have been major obstacles to economic growth: energy, transport and logistics, digital communications, water, and visa reforms.
- Energy Reforms: Unlocking 22,500MW of Power Projects
One of the most pressing challenges facing South Africa is the electricity crisis. To address power shortages and reduce load shedding, Operation Vulindlela has:
• Facilitated the creation of a 22,500-megawatt (MW) pipeline of renewable and independent power projects.
• Ensured that over 10,000 MW of energy projects are formally registered with the National Energy Regulator of South Africa (NERSA)—one of the final steps before these projects can start generating electricity.
• Helped streamline the approval process for private-sector participation in electricity generation.
• Improved the ease of doing business for energy investors by removing regulatory barriers.
Minister Godongwana stated that these energy reforms will help stabilize the electricity supply and significantly reduce power cuts that have hampered economic growth.
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- Freight and Logistics: Private-Sector Participation and Network Access
Operation Vulindlela has successfully led to major reforms in the country’s rail and freight logistics sector, including:
• The approval of the Freight Logistics Roadmap, which allows private-sector participation in freight rail operations.
• Introducing third-party access, enabling private operators to use Transnet’s rail network without discrimination.
• Improving port efficiencies to reduce delays and congestion in South African ports.
These reforms are expected to increase competitiveness and lower transportation costs, making South African exports more attractive to global markets.
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- Affordable Digital Communication: 51% Drop in Data Costs
In a major win for consumers and small businesses, the cost of mobile data has decreased significantly due to competition and regulatory changes introduced through Operation Vulindlela.
• The price of a 1.5GB data bundle has dropped by 51%, making digital services and online education more accessible.
• These reductions have also benefitted entrepreneurs and informal businesses, who now have affordable internet access.
The government continues to push for further data cost reductions, ensuring that digital transformation plays a role in economic recovery.
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- Water Sector Reforms: Clearing Licensing Backlogs
South Africa has faced challenges in water security, affecting agriculture, industry, and urban areas. Operation Vulindlela has:
• Cleared the backlog of water-use licenses, unlocking billions in investment that was previously stalled due to regulatory delays.
• Reinstated the Green Drop, Blue Drop, and No Drop certification systems—for the first time since 2014—to monitor water quality and sanitation in municipalities.
• Strengthened oversight on municipal water infrastructure, helping to address failing service delivery.
By improving regulatory efficiency, these reforms are enabling critical water projects to proceed while ensuring better access to clean water for communities.
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- Visa Reforms: Boosting Tourism and Investment
To support economic growth through skilled immigration and tourism, the government has introduced significant visa reforms:
• e-Visas have been launched for 34 countries, making it easier for tourists to visit South Africa.
• The Trusted Employer Scheme has been established to fast-track work visas for major investors, making South Africa more competitive for skilled professionals.
These visa reforms enhance South Africa’s attractiveness as a business and tourism destination, boosting employment in related sectors.
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Phase 2 of Operation Vulindlela: Expanding Reforms
Building on these successes, Phase 2 of Operation Vulindlela will focus on:
1. Following through on existing reforms in energy, water, logistics, and visa systems.
2. Strengthening local government to ensure better basic service delivery.
3. Harnessing digital infrastructure as a key driver of economic inclusion.
4. Developing efficient, productive, and inclusive cities to improve urban growth.
Minister Godongwana stated that continued implementation of these reforms is crucial for economic stability and job creation.
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Financial Considerations and Budget Adjustments
As part of the broader economic recovery strategy, the 2025 budget includes key fiscal adjustments:
• A 0.5% increase in VAT (Value Added Tax) in 2025, with another 0.5% increase planned for 2026.
• Revenue raised from VAT and corporate tax collections will help fund infrastructure projects and public services.
• The budget deficit is projected to narrow from 5% of GDP in 2024/25 to 3.5% by 2027/28.
Despite fiscal challenges, Godongwana remains optimistic that Operation Vulindlela will continue to deliver reforms that unlock investment and drive economic growth.
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