Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso has warned of “reform drift” after the latest BLSA Reform Tracker showed that quarter-on-quarter momentum had turned negative for the first time since it started tracking South Africa’s reform agenda.

Developed and managed by research consultancy Krutham for BLSA, the index monitors 247 reform deliverables across economic, criminal justice and governance categories.

Covering the period from April to June, the tracker’s overall reform completion index fell to 71.5 from 71.7 in the previous quarter, while remaining 26% above the March 2024 baseline.

"This quarter is the first time we've seen more reforms lose ground than gain it," Mavuso said, highlighting a slowing in the pace of reform in the crucial areas of electricity and freight logistics in particular.

Besides delays to Eskom’s unbundling, the subject of a heated debate in recent weeks between Mavuso and Eskom chairperson Mteto Nyati, the tracker highlighted several other areas where reform progress had “paused”.

While highlighting Eskom’s improved operational performance, which has put a halt to loadshedding and created surpluses of more than 5 GW, the index in the electricity-reform area eased from 69.1 to 67.5, representing a 2.2% quarter-on-quarter fall.

Issues of concern highlighted by Krutham included the emergence of a R2-billion backlog in curtailment compensation payments by Eskom to independent power producers (IPPs), leaving some IPPs facing revenue shortfalls of around 9%.

“Virtual wheeling protocols recorded one of the quarter's steepest declines, down 18.75 points (100 to 81.25), after the finalisation of trading rules missed its April deadline, keeping private electricity traders on the sidelines.

“Municipal debt to Eskom breached R114-billion, with distribution agency agreements offered as a stop-gap rather than a structural fix, and transmission roll-out missed its 2025/26 target (270.8 km against a target of 423 km),” the report released with the index states.

It adds that the South African Wholesale Electricity Market and the independent Transmission System Operator (TSO) both face “tight, at-risk timelines heading into Q3”.

Mavuso has been particularly vocal in reinforcing organised business’s stance that the TSO should own the grid assets, as such ownership would remove any possibility that the entity running the network could favour itself or a related party, such as Eskom Green, over competitors.

Nyati, meanwhile, has questioned why BLSA and Business Unity South Africa were actively advocating for political intervention to transfer the transmission assets to the TSO, having insisted on board independence during the period of State capture.

BLSA has consistently highlighted that the unbundling of the TSO, with the grid assets, is government policy and that separating it from electricity generation would help provide non-discriminatory access to the network and inspire investor confidence.

Meanwhile, the tracker also showed that freight logistics momentum had eased slightly, falling 0.5% to 68.8, amid bankability concerns, the fact that the National Rail Bill was not tabled during the quarter, and concern over rolling-stock constraints.

However, the release of the rolling stock leasing company, or LeaseCo, request for proposals on June 22 was described as a “positive step”, as was the July 3 release of Volume 4 of the Network Statement – the latter having been excluded from the quarter’s scores as it fell outside of the period.

The report also highlighted the fact that Transnet's Rail Infrastructure Manager had signed rail access agreements with all 11 newly qualified private train operating companies, and that the Durban Container Terminal Pier 2 concession had reached financial close.

Nevertheless, BLSA remained concerned that reforms in energy and freight logistics were starting to hit obstacles.

“The biggest risk facing South Africa today is probably no longer the absence of reforms. It is reform drift,” she said.

“We have demonstrated that reforms work: they have restored confidence, they have strengthened credibility, and they have improved the country's outlook.

“Our collective responsibility now is to ensure that momentum is not lost, because ultimately the value of these reforms lies not in announcing the reforms, but in implementing the reforms and in implementing them fully.”

Mavuso also insisted that the “constructive advocacy” of organised business should not be perceived as “opposition”, as it sought to protect the reform progress.