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South African President Cyril Ramaphosa pledged to accelerate measures to fire up the economy, draw investment and make the government more efficient, an undertaking that will provide further impetus to a blistering markets rally if implemented.<\/p>\n
The building of new roads, ports, dams and other infrastructure is proceeding apace, government debt is on a clear path toward stabilisation, and investor and business confidence is rising, Ramaphosa said in his State of the Nation Address to lawmakers in Cape Town on Thursday.<\/p>\n
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Major new initiatives include the establishment of a new company to manage the state\u2019s vast property portfolio and opening up electricity transmission to private companies from this year.<\/p>\n
\n\u201cAlthough we are moving forward, we must not claim any easy victories,\u201d he said. \u201cWe are still far from where we need to be.\u201d<\/p>\n<\/blockquote>\n
The nation\u2019s 10-party ruling coalition has prioritised growing the economy and creating jobs since it took office in 2024, after the African National Congress failed to win a parliamentary majority for the first time since apartheid ended.<\/p>\n
The so-called government of national unity (GNU) is credited with fostering a more pro-business approach to tackling South Africa\u2019s infrastructure challenges, and since its formation there has been significant progress in ending power cuts that hobbled output and investment for more than a decade, with outages having ceased over the past eight months.<\/p>\n
\nA recent study commissioned by the Business Leadership South Africa lobby group found the country\u2019s broad trajectory remains positive and the reform agenda is delivering tangible results.<\/p>\n
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It found almost a quarter of the 245 measures that had been identified to enhance efficiency having been fully implemented and most others work in progress.<\/p>\n
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Electricity reform backsliding threatens grid investment<\/div>\nEskom grid stronger than at any time in last 5 years<\/div>\nGoolam Ballim, chief economist at Standard Bank Group, this week said the economy had entered its strongest phase in a decade and growth may accelerate if efforts to clear an infrastructure backlog gain traction.<\/p>\n
In its regular economic health check published Wednesday, the International Monetary Fund said the country has proved its resilience in the face of global challenges, with gross domestic product projected to expand 1.4% this year and 1.5% in 2027, up from 1.3% last year.<\/p>\n
Read: SA\u2019s economy in best shape in decade \u2013 Standard Bank<\/p>\n
\u201cThe government of national unity has shown that it is possible for South Africans to come from across the political spectrum to work together on a common agenda,\u201d Ramaphosa said. \u201cNow we have a unique window of opportunity to translate these gains into growth.\u201d<\/p>\n
The ongoing turnaround in the government\u2019s performance along, with a rally in metals prices, has underpinned the surge in South African asset prices.<\/p>\n
The rand has gained almost 4% against the dollar this year, adding to a 14% jump in 2025, while yields on 10-year government bonds have dipped to below 8%, the lowest in more than a decade. South African stocks have also been on a tear, with the FTSE\/JSE All Share Index up 45% since the start of 2025.<\/p>\n
\nDespite the optimism, South Africa continues to grapple with deep social challenges.<\/p>\n
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The official unemployment rate has exceeded 30% for more than five years, and runs even higher when those who have stopped looking for work are taken into account. Millions of people go hungry on a regular basis and insecurity is a perennial problem.<\/p>\n
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The economic cost of SA\u2019s long growth drought<\/div>\nSA\u2019s low growth has become normalised, warn economists<\/div>\nRamaphosa described organised crime as the most immediate threat to the country\u2019s democracy and announced that the army would be deployed to help the police combat gang violence and illegal mining.<\/p>\n
An additional 5 500 police officers will be recruited this year, adding to some 20 000 that were previously hired, while the criminal justice system and procurement practices will be fundamentally reformed to stamp out corruption, he said.<\/p>\n
\nThe president acknowledged that scores of municipalities were deeply dysfunctional and unable to provide basic services \u2013 as evidenced by recent water outages in Johannesburg, Pretoria and other towns \u2013 and said the problems are being addressed.<\/p>\n<\/blockquote>\n
\u201cWe have committed R156 billion ($9.8 billion) for water infrastructure and sanitation over the next three years,\u201d he said, adding that he will chair a national water-crisis committee to ensure supplies improve.<\/p>\n
Municipal elections<\/strong><\/p>\n
The shortcomings of local government will take centre stage when municipal elections are held within the next 12 months, a vote that will test the cohesiveness of the fractious ruling alliance anew.<\/p>\n
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Read: Ramaphosa admits ANC failings as municipal elections loom<\/p>\n
Ramaphosa also declared an outbreak of foot-and-mouth disease a national disaster and said the country\u2019s entire cattle heard will be vaccinated against it, requiring some 28 million shots over the next few months.<\/p>\n
He also reiterated previously announced plans to establish an independent power-transmission company, pushing back against his electricity minister\u2019s assertion that transmission assets would remain under the control of state utility Eskom Holdings SOC Ltd.<\/p>\n
Listen\/read: Eskom unbundling faces fresh hurdles as energy reform drags on<\/p>\n
Finance Minister Enoch Godongwana will give details on how the initiatives announced by the president will be funded when he presents his annual budget on February 25.<\/p>\n
\u00a9\u00a02026\u00a0Bloomberg<\/p>\n
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