<\/p>\n
South Africa\u2019s economic growth could turn out to be materially stronger than widely expected as long-standing constraints ease and macroeconomic stability continues to improve.<\/p>\n
\u201cFixing 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,\u201d says Mamokete Lijane, strategist for global markets at Standard Bank Corporate and Investment Banking.<\/p>\n
Read:
Seven charts that show how SA may finally be turning the corner
SA\u2019s president vows renewed growth drive as markets soar<\/p>\n
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.<\/p>\n
Other participants were Solly Letsoalo, chief operating officer at Transnet, and Rivoningo Mnisi, group executive for Eskom Renewables.<\/p>\n
Lijane\u00a0pointed to falling bond yields and improving conditions in South Africa as supporting factors for a potentially higher-than-expected growth rate.\u00a0\u201cI think we might be surprised,\u201d she said.<\/p>\n
Has investor sentiment shifted?<\/strong><\/p>\n Makhaya, a former senior advisor to President Cyril Ramaphosa, framed the discussion around South Africa\u2019s economic progress through reforms and whether investor sentiment towards South Africa has genuinely shifted.<\/p>\n Responding to a question on investor perceptions, Lijane said fixed-income markets have already signalled renewed confidence in the country.<\/p>\n \u201cThere has been a welcome inflow into the fixed income space. There\u2019s more macroeconomic stability and more faith in South Africa\u2019s fiscal framework.\u201d<\/p>\n<\/blockquote>\n However, she emphasised that the legacy of infrastructure failures had weighed heavily on growth.<\/p>\n Read: SA back from the brink, now for the hard part \u2013 Hendrik du Toit<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Referring to Eskom and Transnet, she said the country has come \u201cfrom a place where there\u2019s been massive constraints\u201d that undermined progress.<\/p>\n \u201cAnd this has cumulated into a burden on economic performance.\u201d<\/p>\n \u2018But where\u2019s the growth?\u2019\u00a0<\/strong><\/p>\n Investors, Lijane added, remain focused on when improved stability will translate into faster economic growth.<\/p>\n \u2018We like the reform story and the adjustment in the inflation target but where\u2019s the growth?\u2019 is a common sentiment, she noted.<\/p>\n Part of the delay reflects the time required to rebuild state capacity after years of deterioration in infrastructure.<\/p>\n Listen\/read: Transnet signals turnaround as private operators enter rail and ports<\/p>\n At the same time, financial indicators have improved significantly \u2013 bond yields have fallen by about 400 basis points, implying significantly lower debt servicing costs for the state and improved fiscal sustainability over time.<\/p>\n Transnet has \u2018turned a corner\u2019<\/strong><\/p>\n Transnet\u2019s Letsoalo said the freight and logistics group has \u201cturned a corner\u201d and is pursuing structural reforms centred on private-sector participation.<\/p>\n That includes allocating rail slots to private operators, upgrading infrastructure, and allowing privately run trains on state-owned lines.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Over the longer term, additional corridors will also be opened, although complex business cases mean implementation will take time.<\/p>\n \u201cThe installed capacity is there [at Transnet], but it\u2019s about restoring it to operational efficiency and affordability,\u201d he said.<\/p>\n Eskom is a \u2018partner\u2019\u00a0<\/strong><\/p>\n On the electricity front, Mnisi said Eskom\u2019s performance has improved significantly.<\/p>\n He noted that South Africa now enjoys about 98% electricity supply reliability compared with \u201cless than 10% a few years ago\u201d, while the utility returned to profitability in the past year.<\/p>\n That surplus is being reinvested to stabilise operations and secure future supply.<\/p>\n Mnisi also stressed that Eskom\u2019s role is collaborative and, in reference to its restructuring, that the utility should be viewed as a \u201cpartner, not a competitor\u201d.<\/p>\n Read: Ramaphosa overrules Eskom revised breakup plan<\/p>\n 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.<\/p>\n 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.<\/p>\n Read: Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n\n
Slowly but surely, South Africa does seem to be turning the corner
Electricity reform backsliding threatens grid investment<\/p>\n