South Africans Opt for Private Services as Government Institutions Falter

In a revealing look at the state of South African public services, a report by PricewaterhouseCoopers (PwC) painted a grim picture of declining use and deteriorating quality. The South African Economic Outlook 2024 shows South Africans growing increasingly disillusioned with government services—from healthcare to security, citizens are pivoting to privately-offered alternatives.

This exodus from public to private is not a sudden shift but the culmination of years of what has been described as systemic corruption and incompetence eroding state capabilities. The PwC report highlights a government overwhelmed by challenges, buckling under the demand and failing to offer the service quality once considered standard.

Data from the latest Governance, Public Safety and Justice Survey by Statistics South Africa (Stats SA) supports PwC's findings, showing a considerable decrease in public service usage. For instance, public hospital usage in the nation saw a drop from nearly one-fifth of adults in 2019/2020 to just 13.6% in the past year. It's a trend that even affects highly-regarded public bodies such as the South African Revenue Service (SARS).

Recognizing the impact on both the economy and citizens' well-being, South African businesses are stepping into the fray—Business Unity South Africa (BUSA) has been in dialogue with the government to bolster the country's ailing state enterprises. Innovative partnerships are emerging, with plans for private train operators to enter the rail logistics arena as early as 2024.

Amidst these challenges, voices from the business sector, like Sim Tshabalala, CEO of Standard Bank Group, are clamoring for reform. During the World Economic Forum, Tshabalala urged African nations, particularly South Africa, to diminish the investment risk by advocating economic liberalization, improving the ease of business, and instituting fiscal discipline.

Tshabalala accentuated the importance of removing bureaucratic obstacles to business development. His recommendation? To simplify the company registration process to mere hours rather than months. This streamlining is suggested to not only bolster small businesses but also to expand the tax base and bolster state resiliency.

There are focal areas where the public sector continues to excel, such as the National Treasury and the Reserve Bank. The success seen in these pockets of government illustrates what could be possible if similar operational proficiencies were implemented across the board.

In his remarks, Tshabalala did not just challenge the government to improve the quality and efficiency of its institutions but to reshape them into professional bodies that facilitate, rather than hinder, business operations across the country.

A significant part of the narrative is that this is not simply an issue of poor service delivery; it's also a challenge of lost potential. South Africa, with its notable competitive advantages, stands at a crossroads, with the capacity to capitalize on these strengths if the public sector can reform and modernize.

The struggle for a more productive government is not simply a battle for better services but a foundational campaign to secure the economic future of South Africa.