SA growth could surprise to the upside – Standard Bank

South Africa’s economic growth could turn out to be materially stronger than widely expected as long-standing constraints ease and macroeconomic stability continues to improve.

“Fixing the fiscus comes through a lag. But South Africa is en route to resetting growth and we might be underestimating how high growth is going to be,” says Mamokete Lijane, strategist for global markets at Standard Bank Corporate and Investment Banking.

Read:
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Lijane was speaking during a panel discussion at the 2026 Standard Bank African Markets Conference in Cape Town, facilitated by Trudi Makhaya, senior advisor at Boston Consulting Group.

Other participants were Solly Letsoalo, chief operating officer at Transnet, and Rivoningo Mnisi, group executive for Eskom Renewables.

Lijane pointed to falling bond yields and improving conditions in South Africa as supporting factors for a potentially higher-than-expected growth rate. “I think we might be surprised,” she said.

Has investor sentiment shifted?

Makhaya, a former senior advisor to President Cyril Ramaphosa, framed the discussion around South Africa’s economic progress through reforms and whether investor sentiment towards South Africa has genuinely shifted.

Responding to a question on investor perceptions, Lijane said fixed-income markets have already signalled renewed confidence in the country.

“There has been a welcome inflow into the fixed income space. There’s more macroeconomic stability and more faith in South Africa’s fiscal framework.”

However, she emphasised that the legacy of infrastructure failures had weighed heavily on growth.

Read: SA back from the brink, now for the hard part – Hendrik du Toit

Referring to Eskom and Transnet, she said the country has come “from a place where there’s been massive constraints” that undermined progress.

“And this has cumulated into a burden on economic performance.”

‘But where’s the growth?’ 

Investors, Lijane added, remain focused on when improved stability will translate into faster economic growth.

‘We like the reform story and the adjustment in the inflation target but where’s the growth?’ is a common sentiment, she noted.

Part of the delay reflects the time required to rebuild state capacity after years of deterioration in infrastructure.

Listen/read: Transnet signals turnaround as private operators enter rail and ports

At the same time, financial indicators have improved significantly – bond yields have fallen by about 400 basis points, implying significantly lower debt servicing costs for the state and improved fiscal sustainability over time.

Transnet has ‘turned a corner’

Transnet’s Letsoalo said the freight and logistics group has “turned a corner” and is pursuing structural reforms centred on private-sector participation.

That includes allocating rail slots to private operators, upgrading infrastructure, and allowing privately run trains on state-owned lines.

Over the longer term, additional corridors will also be opened, although complex business cases mean implementation will take time.

“The installed capacity is there [at Transnet], but it’s about restoring it to operational efficiency and affordability,” he said.

Eskom is a ‘partner’ 

On the electricity front, Mnisi said Eskom’s performance has improved significantly.

He noted that South Africa now enjoys about 98% electricity supply reliability compared with “less than 10% a few years ago”, while the utility returned to profitability in the past year.

That surplus is being reinvested to stabilise operations and secure future supply.

Mnisi also stressed that Eskom’s role is collaborative and, in reference to its restructuring, that the utility should be viewed as a “partner, not a competitor”.

Read: Ramaphosa overrules Eskom revised breakup plan

Ramaphosa, in his State of the Nation Address on 12 February, stressed that South Africa is moving ahead with plans to establish an independent state-owned power-transmission company as part of the overhaul of the utility.

The president said he is establishing a task team under the national energy crisis committee to address the various issues relating to the Eskom restructuring process, including clear timeframes to phase in the implementation.

Read:
Slowly but surely, South Africa does seem to be turning the corner
Electricity reform backsliding threatens grid investment

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