SA Launches Phase Two of Operation Vulindlela to Drive Inclusive Growth

In a determined stride towards accelerating South Africa’s economic recovery and transformation, President Cyril Ramaphosa officially launched the second phase of Operation Vulindlela on Wednesday, 7 May 2025, at the Union Buildings. This ambitious continuation of the structural reform programme will focus on three new strategic priorities: tackling the legacy of spatial inequality, revitalising local government capacity, and ushering in a robust digital transformation.

President Ramaphosa emphasised the urgency and inclusivity of the mission ahead. “We need growth that is both rapid and inclusive,” he said. “Growth that serves the millions still unemployed and unlocks opportunities for our youth. This is not just about improving numbers—it is about transforming lives and renewing hope.”

Addressing Spatial Inequality: Bringing People Closer to Opportunity

The first focal point of Phase Two is confronting South Africa’s deeply entrenched spatial disparities, a lingering scar of apartheid urban planning. Many South Africans—especially the poor—remain physically and economically disconnected from urban centres where jobs and essential services are concentrated.

“Our cities must evolve,” Ramaphosa declared. “We can no longer accept a reality where the poorest South Africans spend up to 40% of their income on transport, simply to reach work.”

To bridge this gap, the government will overhaul its housing policies. Central to this effort is the introduction of demand-side subsidies to promote homeownership and affordable rentals in well-located urban areas. In tandem, the state will release publicly owned land and buildings, particularly in city centres, for low-cost housing development.

The reforms will also streamline the property titling process, making it more affordable and accessible. “Title deeds are more than just paperwork. They represent financial security and a gateway to credit and economic mobility,” Ramaphosa noted.

A sweeping regulatory review is also on the agenda, aimed at eliminating red tape that hampers inner-city development. By focusing on urban densification rather than peripheral sprawl, the reforms aim to reshape South African cities into dynamic economic hubs accessible to all.

Fixing Local Government: Building Capability Where It Matters Most

The second pillar of Operation Vulindlela’s new phase is to strengthen the performance of local government, long identified as a major bottleneck to service delivery and economic development.

“Many municipalities are simply failing to deliver even the most basic services,” the President acknowledged. To reverse this, the reform blueprint focuses on restoring professionalism and accountability in local governance.

Key initiatives include:

• Professionalising utilities that provide water and electricity, ensuring they are equipped with technical expertise, financial independence, and strong oversight.

• Expanding the mandate of the Public Service Commission to include local government, enabling it to enforce competency standards for appointments, particularly for top roles like municipal managers and CFOs.

• Revising the White Paper on Local Government, which will assess and potentially restructure the institutional framework of municipalities.

• Redesigning fiscal arrangements, with the National Treasury reviewing the local government funding model to ensure municipal revenue aligns with service delivery responsibilities.

These reforms are designed not only to restore functionality in municipalities but also to catalyse grassroots economic activity by ensuring stable infrastructure and efficient local administration.

Accelerating Digital Transformation: Laying the Foundations of a Smart State

Digital transformation has emerged as the third and equally critical area of reform. According to President Ramaphosa, “The future belongs to nations that embrace technology not just in the private sector, but across public life.”

In April 2025, the Cabinet approved a comprehensive Digital Transformation Roadmap. This ambitious plan envisions the creation of nationwide digital public infrastructure, with goals that include:

• Establishing a unified digital identity system.

• Enabling fast, reliable payment systems to boost financial inclusion.

• Providing online access to critical public services, such as applying for identity documents or passports.

This effort is not merely about technology, but about broadening access, improving service delivery, and reducing inequality in digital access.

Looking Back: Key Wins from the First Phase

Launched in October 2020 in response to the COVID-19 economic crisis, Operation Vulindlela emerged as a cornerstone of structural reform in South Africa. Its first phase targeted five critical sectors: energy, logistics, telecommunications, water, and visa systems.

The results have been significant:

• Electricity sector reforms reduced the frequency and intensity of load shedding. Private investments in renewable energy flourished, unlocking billions of rands in economic activity.

• Freight and port reforms under the Freight Logistics Roadmap opened up rail networks to competition and brought private sector participation to port terminals—all while keeping infrastructure under state ownership.

• A successful spectrum auction enabled major investment in telecoms, enhancing network quality and slashing data costs.

• The water license system was streamlined, accelerating permits for projects in sectors like mining and agriculture.

• A new skilled visa framework was adopted, making it easier for businesses to recruit critical talent and drive job creation.

President Ramaphosa applauded the collective efforts that made these advances possible. “This has been a whole-of-government initiative. Ministers, directors-general, and public entities have stepped up to steer our economy back onto a path of reform and renewal.”

The Road Ahead: A Nation on the Cusp of Renewal

As South Africa steps into the second phase of Operation Vulindlela, the stakes are clear. “There is a generation that has never known economic growth,” Ramaphosa said somberly. “We owe it to them—and to ourselves—to act decisively.”

If the new reforms are implemented “swiftly and boldly,” the President believes South Africa can foster a more equitable, prosperous, and inclusive future.

With political will, institutional support, and the active participation of civil society and the private sector, Operation Vulindlela promises to be more than a plan. It may well be the defining catalyst of a new South African growth story.