While it is still uncertain that it will be implemented as envisaged, removing the trade blockages that inhibit companies from accessing the much larger continental market would be transformative for many South African businesses. The lack of a dependable electricity supply will have a severe dampening effect on the South African economy for up to a decade. This means that the country is unlikely to escape from its middle-income trap in the near term. We conclude that competition for resources within the ruling ANC fuels factional politics. Graft and corruption flourish as government expands its sasol stock role in the economy in an effort to increase employment.

South Africa Economic Update, Edition 15 "Learning: Overdue Reforms and Emerging Priorities in Basic Education"

Therefore there is a large funding gap that provides the space for the New Development Bank to add value; by meeting this need and putting Africa on a sustainable growth trajectory. We believe that the significant number of the Bank’s clients will come from sub- Saharan Africa. According to the World Travel & Tourism Council, travel and tourism support around 10% of jobs in the country. The speech https://www.liberty.co.za/ took on a notable diplomatic tone, reflecting South Africa’s role in an increasingly fragmented global order. Ramaphosa reaffirmed South Africa’s commitment to multilateralism, highlighting its G20 presidency as an opportunity to champion Africa’s economic interests on the global stage. Municipal service failures remain a pressing concern, with unmaintained roads, disrupted electricity, and inadequate water provision plaguing local governance.

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• Due to the aridity of the land, only 13.5% can be used for crop production and only 3% is considered high potential land.
• The effects of the war in Ukraine are fading, and hopefully, there will be no repeat of the pandemic, severe flooding or mass-scale civil unrest.
• South Africa’s National Development Plan emphasizes the importance of infrastructure development, and initiatives like renewable energy projects and upgrading transportation networks can pave the way for improved economic performance.
• South Africa scores relatively well for the efficiency of their product markets and for having a large market size.
• If the expectations that firms and households hold for future inflation stray from the inflation target, then higher nominal wages and consumer prices are likely to emerge.

Protectionist trade policies, geopolitical tensions, and supply chain disruptions remain potential risks. However, experts believe that South Africa is better equipped to navigate these challenges due to its focus on structural reforms and proactive fiscal measures. Economic growth plays a critical role in addressing climate change challenges. South Africa https://www.alexforbes.com/ is one of the world’s largest carbon emitters due to its reliance on coal for energy production.

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Reducing bureaucratic barriers, streamlining regulations, and combating corruption can improve the ease of doing business and increase investor confidence. Investing in education and skill development is crucial for building a capable and adaptable workforce. South Africa needs a skilled workforce to fill positions in various sectors, from technology to how to buy sasol shares manufacturing.

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This stability has lowered the risk premium attached to South African investments. However, Packirisamy cautions that continued momentum in implementing reforms is essential to maintain investor confidence. For the first time in years, load shedding has been absent since March 2024, thanks to improved Eskom performance and the adoption of solar energy solutions by businesses and households. Fiscal rules are there to promote discipline, ensure that debt can be paid and enhance credibility. The experience in the 105 countries that have adopted them suggests that strong, well-designed rules can signal a government’s commitment to fiscal prudence.

And we have found ourselves in a situation where we are spending the bulk of national income or government revenue on state bailouts. The money could be invested in other development projects, like infrastructure. And with this mind, this institution is well placed to provide complementary support to address the infrastructure deficiency, unlock development and economic growth potential. It needs fast economic growth to reduce high unemployment and poverty but that has not been forthcoming for two reasons.

Structural challenges — from inefficiencies in SOEs to regulatory red tape — continue to hamper investor confidence. President Cyril Ramaphosa delivered his 2025 State of the Nation Address (SONA) against the backdrop of South Africa’s evolving political and economic realities. Addressing Parliament in Cape Town City Hall today, he outlined an ambitious framework for national renewal, emphasizing economic revitalization, infrastructure investment, and the country’s place in the shifting global order. The coalition government has made strides in implementing reforms to enhance economic performance. Inflation remains a key focus, with November 2024 recording an annual rate of just 2.9%. While inflation is expected to average around 4.5% in 2025, Kganyago has warned of external risks such as global oil price volatility, which could affect domestic prices.