Private sector takes over South Africa's core infrastructure as public systems fail

South Africa’s critical infrastructure is now being operated, managed and rebuilt by private companies. That shift, accelerated by the deterioration of public institutions and enabled by corporate investment, represents the most significant reorientation of the economy since democracy.

The mechanics of this transition became visible this week when President Cyril Ramaphosa released his weekly newsletter, timed to coincide with Eskom’s annual results and a joint statement between Eskom and Business Leadership SA signaling resolution of their dispute over the utility’s unbundling process. In the newsletter, Ramaphosa made an unusually explicit case for dismantling state monopolies, drawing a direct parallel to telecommunications liberalization. When Telkom held its fixed-line monopoly, he noted, telephone connections were expensive, access was limited and millions of South Africans, particularly in poorer and rural communities, were effectively excluded. The opening of the telecommunications sector to new operators, he argued, brought massive new investment and dramatically reduced communication costs. The implication was unmistakable: state monopolies restrict progress; private-sector competition accelerates it.

That statement represents perhaps the strongest endorsement of free market economics from any president and ANC leader since 1994.

What makes this moment significant is not the rhetoric but the operational reality it describes. The private sector now controls or operates critical infrastructure that was once the exclusive domain of government: electricity generation and distribution through Eskom, port operations including Pier Two at Durban Port, and rail and freight logistics through Transnet. The scale of this shift is difficult to overstate. Since the colonial era, no period has seen private companies wield comparable influence over vital public infrastructure.

The speed and relative absence of organized resistance to this transformation requires explanation. Parliamentary opposition has come only from the EFF and MK, neither of which has mounted a substantive policy campaign against the changes. The ANC, which would historically have been the primary source of internal resistance, is consumed by internal battles over candidate selection for metros and councils and appears incapable of conducting substantive policy discussions on the matter. The SACP and Cosatu, traditional sources of opposition within the Tripartite Alliance, have launched little public pushback. The SA Transport and Allied Workers Union has had to accept private operation of Durban Port’s Pier Two. Ramaphosa has held personal conversations with the National Union of Mineworkers about Eskom’s unbundling, a dynamic that complicates potential labor opposition.

The underlying cause of this transformation is institutional collapse. The State Capture era under Jacob Zuma left Eskom and Transnet severely weakened through systematic looting orchestrated by figures including Brian Molefe and the Guptas. The Covid-19 pandemic further drained public resources and accelerated state breakdown. These dual shocks created a vacuum that private capital was willing and able to fill. Through initiatives like Business For SA, companies provided expertise and resources that public institutions could no longer generate internally. While profit motive was clearly present, many executives involved were also motivated by a desire to stabilize South Africa’s economy and improve conditions for millions of people.

The irony is profound. The governance failures of a leader associated with leftist rhetoric directly enabled the conditions for a rightward economic turn. Less than two decades ago, when Jacob Zuma was ascending to ANC leadership at Polokwane, there was significant concern that the SACP would push the government toward socialism. As recently as 2023, Anthea Jeffery published “Countdown to Socialism,” arguing the ANC was pursuing the most direct route to socialism. The trajectory has moved in the opposite direction entirely.

By contrast, the debate about whether South Africa will move left or right has, for the moment, effectively concluded. The operational evidence is clear: the country is moving right, with private operators now responsible for delivering the services that determine economic function. Whether that delivery actually improves outcomes for the millions who depend on these networks remains the question no annual result or presidential newsletter has yet answered.