Focus is on project preparation and creating a pipeline of bankable projects (a long-standing challenge in South Africa), strengthening public-private partnerships (PPPs) through reforming their frameworks, as well as using risk-sharing initiatives and financial instruments to unlock greater private funding. Private enterprises have been driving the fixed-investment agenda and effective delivery of, in particular, energy infrastructure. However, they have also shown reluctance to invest given structural constraints, including tough operating conditions, crime and corruption, weak demand, and overall limited business confidence. Unlocking faster growth will require greater capital formation, and effective ways to deliver infrastructure to create the foundation for the economy to grow in the future.

Agriculture and food processing

And there will likely be bumps along the way, not least from the challenges that come with a coalition government (including divergent views on crucial policy areas, as already seen), but also from possible downside risks to growth in the global environment, linked to inflation, geopolitics, continued economic weakness in China, and others. While government looks to maintain fiscal prudence and https://www.liberty.co.za/ macroeconomic stability, two key focus areas stand out in its plan to spur on economic growth. 2023 was a challenging year for the South African economy – an expected anemic GDP growth of below 1 per cent, influenced by persisting freight, logistics, governance and energy supply constraints, high interest rates and rising fuel and food prices.

Eurozone economic outlook, September 2024

The result is the 10-party Government for National Unity (GNU), representing about 70% of voters (although voter turnout did drop to 58.6% from 66% five years before). On trade, the African Continental Free Trade Area (AfCFTA) remains a pillar of South Africa’s economic strategy. With the country positioning itself as a regional hub for green manufacturing, electric vehicles, and digital services, Ramaphosa reiterated South Africa’s ambition to lead Africa’s industrialisation wave. Addressing unemployment, particularly among youth, Ramaphosa reaffirmed the expansion of the Presidential Employment Stimulus, which has created 2.2 million work opportunities.

NIGERIAN CONTENT DEVELOPMENT AND MONITORING BOARD URGED TO IMPLEMENT THE OIL AND GAS DEVELOPMENT ACT

The government has not funded the infrastructure needed to unlock South Africa’s vast renewable energy potential. It is heavily dependent on non-renewable energy (coal), which also worsens global warming and speeds up climate change. But it desperately needs to grow the economy at a faster rate, given very high unemployment, poverty and inequality. With the correct government support, South Africa can increase the jobs in the manufacturing, testing, and analysis sectors of the growing Space industry. KPMG South Africa is forecasting economic growth of 1.5% in 2025 and a further 1.8% in 2026. The inflation rate is expected to end 2024 well below target and remain there through 2025.

Joburg ETC

South African companies which provide services related to the Space industry, also increasing, and with the correct government legislation and support, this sector is expected to grow in South Africa. According to Lisette IJssel de Schepper, the Chief Economist at the Bureau for Economic Research (BER), the Q3 GDP slump was mainly driven by a sharp drop in the agriculture sector. This resulted in a quarterly contraction, setting back the entire year’s economic expectations. While many had hoped that post-election optimism and the end of load shedding would help turn the economy around, the reality has been quite different. KPMG is the brand under which the member firms of KPMG International Limited (KPMG International) operate and provide professional services.

Consequently, interest rates are set to continue to decline, which will subsequently provide breathing room for consumers and businesses alike. The unemployment rate is still a concern and is expected to decrease slightly from the current 33% over the same period. In 2003, the government started taking climate change seriously with the release of the White Paper on Renewable Energy. The government started intentionally trying to increase the use of renewable energy while decreasing the use of dirty energy, such as coal. However, the domestic growth outlook may turn around and improve if loadshedding is reduced and rail and port infrastructure constraints are resolved, given the results of initial reforms in these sectors, and if cost-of-living pressures are reduced due to moderating inflation and potential rate cuts toward the year’s latter half. Despite recording the worst year of loadshedding1 on record (so far) in 2023 (more than 6,700 hours of loadshedding were recorded in 2023,2 compared to about 3,700 in 2022),3 South Africa managed to avoid a technical recession.

In July 1996, the US and South Africa signed an investment fund protocol for a $120 million OPIC fund to make equity investments in South and Southern Africa. OPIC is establishing an additional fund – the Sub-Saharan Africa Infrastructure Fund, capitalised at $350 million – to investment in infrastructure projects. The Trade and Development Agency also has been actively involved in funding feasibility studies and identifying investment opportunities in South Africa for U.S. businesses. Mining has been the main driving force behind the history and development of Africa’s most advanced economy. Large-scale and profitable mining started with the discovery of a diamond on the banks of the Orange River in 1867 by Erasmus Jacobs and the subsequent discovery and exploitation of the Kimberley pipes a few years later. Gold rushes to Pilgrim’s Rest and Barberton were precursors to the biggest discovery of all, https://satrix.co.za/ the Main Reef/Main Reef Leader on Gerhardus Oosthuizen’s farm Langlaagte, Portion C, in 1886, the Witwatersrand Gold Rush and the subsequent rapid development of the goldfield there, the biggest of them all.

• They have not funded the mass rollout of renewable energy, or connected renewables to the national grid.
• KPMG South Africa is forecasting economic growth of 1.5% in 2025 and a further 1.8% in 2026.
• As noted in a previous edition of this publication,32 various plans have been set in motion to address supply-side constraints via the reform program, Operation Vulindlela (OV), launched in 2020.
• In 2003, the government started taking climate change seriously with the release of the White Paper on Renewable Energy.

However, he emphasized that private-sector growth is crucial to sustainable employment, urging businesses to engage with the SAYouth.mobi platform and expand workplace experience programs. With GDP growth struggling to surpass 1.5% in recent years, achieving the government’s 3% target will be a significant challenge. While infrastructure spending is a key strategy, Roodt cautioned that it alone may not be enough to drive the necessary economic expansion. Past studies have looked into the role of energy in South Africa’s economic growth, but their methods have provided only limited information about whether South Africa can make a smooth transition from dirty to clean energy. Past studies have looked into the role of energy in South Africa’s economic growth, but their methods have provided only limited information about whether South Africa can make a smooth transition from dirty to clean energy. As a result of a November 1993 bilateral agreement, the Overseas Private Investment Corporation (OPIC) can assist US sasol ltd investors in the South African market with services such as political risk insurance and loans and loan guarantees.