Africa-Press – South-Africa. Over the past decade, South Africa’s economy has endured multiple shocks and regressions, but with several reforms underway and notable progress in certain areas, the worst seems to be over.
Now, unless the country sees a severe political or service-delivery shock, South Africa is well on the path to recovery and annual growth of 1% to 2%, with the likelihood of a sustained collapse to zero very low.
This is feedback from Efficient Group economist Dr Francois Stofberg, who explained that, while it is tempting to think South Africa’s decline will continue indefinitely, the country has already absorbed the worst shocks.
Stofberg pointed out that South Africa’s real gross domestic product (GDP) growth has averaged less than 1% since 2014.
However, progress in several reform areas across the country, including the electricity and logistics sectors, points to a sustained recovery in the near future.
“Barring a severe political or service-delivery shock, the probability of a sustained collapse to zero or negative growth is very low,” Stofberg said.
He explained that two of the biggest drags on South Africa’s eocnomy over the past decade – electricity and logistics – are showing strong signs of recovery.
Eskom’s recovery in terms of keeping the lights on can clearly be seen. The country went from almost 300 days of rolling blackouts in 2023 to only 69 days in 2024.
By mid-2025, the grid had delivered more than 100 consecutive days without load-shedding, with Eskom’s energy availability factor holding in the mid-60s.
“The electricity crisis is not solved but the structural break risk from total grid failure has eased,” Stofberg said.
On the logistics front, Transnet’s progress continues to be slow, with the state-owned utility continuing to be a major bottleneck as freight rail volumes remain at historical lows.
However, while progress is slow, it is also steady, and the utility’s reform momentum is visible.
The government has guaranteed R51 billion to stabilise Transnet’s balance sheet, is opening freight rail to private operators, and has launched the concessioning of container terminals.
Stofberg said that while execution will take years, the reform vector is finally positive.
Slow and steady
Dr Francois Stofberg
While Stofberg is upbeat about South Africa’s economic turnaround, this optimism remains cautious.
He cautioned South Africans not to expect 3% to 5% annual growth anytime soon, as high unemployment, poor education outcomes, and low investment keep the ceiling low.
In particularly, he warned that two “domestic fragilities” still deserve caution when considering South Africa’s growth prospects.
Firstly, he pointed out that the country’s water infrastructure and municipal finances are weak, with Gauteng – South Africa’s economic powerhouse – already experiencing severe outages.
Secondly, Stofberg warned that South Africa’s fiscal path is tight, as the government’s debt is projected to peak at 77% of GDP in 2025/26, and any revenue shortfall or bailout could push this even higher.
He noted that external risks, such as trade tensions, also need to be monitored.
“South Africa has little chance of a golden era of rapid growth, but it also faces minimal risk of collapse into failed-state status,” he explained.
Therefore, while the ceiling may be low, the floor is firming, and with reforms underway, 1% to 2% real GDP growth looks achievable over the next few years.
While 1% to 2% growth per year may sound modest, Stofberg said it signals that the worst is over.
“Relative to the global context, that stability matters. The International Monetary Fund projects advanced economies to grow just 1.4%,” he pointed out.
“South Africa’s growth may not dazzle, but in a slowing world, it can increasingly look resilient.” He explained that, in a slowing world, South Africa can, once again, look comparatively strong.
“The structural breaks are behind us. With electricity stabilising, logistics reforming, politics consolidating to the centre, and institutions holding, the most likely future is one of slow, steady stabilisation,” he said.
Source: dailyinvestor
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