Out of South Africa’s key network industries, the telecommunications industry remains as the one that is “still functional”.
As a result, improving the energy, transport/logistics and water industries is paramount, as there is a risk of them becoming dysfunctional, according to the latest risk assessment report produced by the Institute of Risk Management South Africa (IRMSA).
The annual IRMSA Risk Report delves into the country’s risk profile, looking at issues such as infrastructure, divisive politics, political instability, skills and food security.
According to the report, historically, public and private governance failures illustrated the need for closer collaboration between the sectors. This is mainly because SA is a political economy, so when good governance fails, the economy also fails, it states.
“Therefore, through BLSA [Business Leadership South Africa] (amongst others), the private sector’s deliberate strategy is to help build a capable state, because a deteriorating trading environment will manifest in dysfunctional network industries: energy, transport/logistics, water and telecommunication.
“If the trading environment improves, so too will business confidence, which will facilitate increased investment. When investment increases, the economy will grow. Only when the economy grows, will the structurally-embedded high unemployment be addressed (which drives many other risks).
“To date, in this collaborative business-state partnership, more than R170 million has been invested in improving energy, transport and logistics, as well as mitigating crime – with more than 350 private sector experts mobilised.”
Under the risk and opportunity themes of the report, capacitated infrastructure is identified as an opportunity, with failed public infrastructure being the notable risk.
According to the report, digital/telecommunications infrastructure risks are driven by spatial disparities and inequality that left many areas with economic potential underdeveloped in terms of digital communication infrastructure.
Additionally, slow spectrum allocation, delays in digital migration and regulatory bottlenecks inhibit private investment and stifle competitiveness in the telecommunication and digital economy sector. “Barriers to entry limit the market to a few major telecoms operators.”
Consequently, the telecoms risks have an impact on continued connectivity disparities between urban and rural populations, and between income groups.
“SMMEs, especially in informal or rural sectors, remain excluded from e-commerce and digital finance ecosystems, limiting their contribution to SA’s economy, and its broader transformation and development aspirations. Lack of digital skills and access to online learning worsen unemployment.”
The report highlights that digital infrastructure and technology investment could be hugely beneficial in improving service delivery and enhancing economic growth. This, it says, will include unlocking rural innovation, education and entrepreneurship.
“Supporting SMMEs with digital tools − for example, mobile payments, online marketing and logistics − can boost GDP [gross domestic product] and job creation. Technology lends itself especially to reskilling the youth through online education and coding academies to support the growing technology sector.”
State erosion
South Africa’s ethical leadership within law enforcement has been thrust into the spotlight, amid explosive allegations of police state capture made by KwaZulu-Natal police commissioner Nhlanhla Mkhwanazi.
In the IRMSA Risk Report’s foreword, professor Letlhokwa George Mpedi, vice-chancellor and principal at the University of Johannesburg, writes that analysis of the data that informed the 2025/26 study points to the fundamental root cause driving SA’s national risk profile: the lack of institutional and leadership capacity.
The report ranks governance and leadership failures among the top risks faced by the country.
Speaking to eNCA, Vanessa Thurlwell, risk advisor, implement or and facilitator at the Institute of Risk Management, told the broadcaster that several issues have an influence on the above-mentioned.
“We’ve got incredibly robust regulations and legislations, code of conduct and so forth, but we’re just not a compliant culture and that really comes from the tone from the top as well as from the bottom.
“We really need to have credible rule of law, but we’re not going to have it without the right leadership at all of those levels.”
Thokozani Mvelase, CEO of the Communication Risk Information Centre (COMRiC), has also issued a warning about SA’s deteriorating rule of law, saying it poses one of the most significant risks to future stability, prosperity and global standing.
Mvelase made the comments this week at the Cape Town launch of the IRMSA risk assessment report.
He pointed to how weakening public trust in legal institutions, compounded by governance failures and political overreach, is eroding the foundation on which SA’s democratic order rests.
Mvelase noted that while the country’s Constitution and independent institutions remain intact on paper, the practical application of justice is becoming increasingly inconsistent − a trend that threatens everything from social cohesion to investor confidence.
The COMRiC CEO also warned that poor infrastructure and weak administrative capacity are contributing to the collapse of effective governance.
“Have you been to our police stations, our courts, our municipal offices? Case files go missing, systems don’t work and basic services are failing. This isn’t just about inefficiency, it’s about the erosion of institutional memory.”
Mvelase called for collective responsibility from all three arms of government to restore the credibility of the justice system, while also urging civil society to remain vigilant but even-handed.
“There are many organisations doing vital work to uphold the Constitution and protect rights,” he said. “But even civil society is not immune from bias, and inconsistency can weaken the credibility of those who claim to speak truth to power.”
According to Mvelase, the rule of law must not only be defended in principle, but actively upheld in practice. “If we are serious about building a capable, ethical and secure state, then restoring the credibility of the rule of law must be at the heart of that project.”
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