As South Africa prepares for next week’s Budget Speech, President Cyril Ramaphosa has signalled a shift in the national narrative – from one of recovery to one of guarded optimism.
Delivering his remarks during the debate of the State of the Nation Address (SONA) on Thursday, 19 February 2026, the President noted the importance of a growing economy.
“[We] know that what will make the greatest difference in people’s lives are jobs and other livelihood opportunities. What will make the greatest difference is accelerated economic growth. A growing economy means expanding opportunity and it means hope.
“We have not experienced the excitement and the promise of rapid growth for almost 20 years, but we are on the cusp of achieving it now. We are focused on rebuilding the economy and driving investment.
“We should not underestimate the scale of the task ahead nor diminish the progress we have made,” President Ramaphosa said.
The President acknowledged that while progress is modest, the “momentum of change is building”.
Among the other positive indicators, South Africa’s economy has shown marginal yet positive growth over the past four quarters – expanding by 0.6% in Q4 2024, followed by 0.1% in Q1 2025, 0.8% in Q2 2025, and 0.5% in Q3 2025.
Inflation rates have also been steady, standing between 3.5% and 3.6% since October last year.
“Our task now is to sustain this momentum, to protect and build on the progress we have made, and to ensure that it results in a tangible improvement in the life of every South African. Improved economic indicators may seem distant and abstract, but they have a real impact on our lives.
“Lower borrowing costs for the state frees up resources for health and education, for the police and for better services. Reduced public debt enables the private sector to invest more of its capital in expanding production and jobs.
“A lower inflation rate reduces the cost of living, enabling families to pay for food and other basic needs. And a declining unemployment rate means an income for more families and hope for more young South Africans,” he said.
Removing impediments
The President told the gathering that government is determined to rebuild the economy and drive investment.
To do this, government is addressing several impediments, including load shedding, infrastructure and efficiency at the country’s ports.
“Severe load shedding was debilitating our economy, lowering production, raising costs and deterring investment. We have effectively ended load shedding.
“Overburdened infrastructure and inefficiency at our ports and on our rail lines have for years been reducing our competitiveness and harming our export industries. We are improving operational performance through investment, increased capacity and far-reaching reforms.
“To respond to low levels of investment and policy uncertainty, we are strengthening policy formulation and reducing regulatory burdens,” he noted.
Additionally, poor governance, diminishing state capacity and corruption are being tackled by “focusing on the professionalisation of the public service, improved efficiency and the modernisation of our procurement system”.
Macroeconomic challenges
President Ramaphosa noted that a “challenging macroeconomic environment” has also proved a stumbling block for economic growth.
“[This] is why we have been reducing high debt service costs and supporting lower inflation and interest rates.
“Perhaps one of the most immediate impediments to faster economic growth is dysfunctionality in many municipalities. We are addressing this through an overhaul of our local government system through the review of the White Paper, and through direct interventions in municipalities in trouble.
“The transformation of our network industries is the platform on which rapid inclusive economic growth will be achieved,” he said.
Concurring voices
President Ramaphosa’s optimism for economic growth is not without merit.
Earlier this month, the International Monetary Fund (IMF) – following consultative meetings with government, the SA Reserve Bank, Eskom, Transnet, business, organised labour and academia amongst others – wrote that the South African economy is on the up.
The IMF acknowledged that South Africa’s economic growth has been hampered by “repeated global shocks and domestic challenges, including, more recently, increased protectionism, fragmentation and global trade policy uncertainty”.
Despite this, the economy has proven its resilience owing to “ample natural endowments, independent institutions, and strong monetary policy framework”.
“Growth is projected to accelerate to 1.4 percent in 2026, reaching 1.8 percent in the medium term, supported by resilient consumption and investment driven by structural reforms. Inflation is projected to reach the 3 percent target by end‑2027.
“Although fiscal deficits are moderating, they remain elevated, and public debt is therefore projected to continue rising over the medium term.
“Risks are tilted to the downside, mainly stemming from global fragmentation, trade tensions, and domestic reform fatigue, while upside risks include faster reform implementation and stronger global growth,” the IMF said in a statement.
The international financial institution noted that economic activity had “picked up in 2025, with growth estimated at 1.3 percent, supported by robust private consumption”.
“Inflation moderated to an average of 3.2 percent, enabling a shift to a lower 3 percent inflation target. The current account remained stable despite higher US tariffs and global policy uncertainty, and the banking sector remains sound. Public debt, however, has risen further, reaching 77 percent of GDP at end‑March 2025,” the IMF stated.
Furthermore, South Africa was removed from the Financial Action Task Force (FATF) grey list – adding weight to confidence going forward.
South Africa had been placed on the grey list in February 2023 due to, including, lax legal frameworks against money laundering and terrorist financing.
“South Africa’s removal from the FATF Grey List in October 2025…marks significant gains for the country, for business confidence and for investment.
“The FATF decision was the fruit of extensive collaboration between government departments and the financial sector to strengthen the country’s anti-money laundering regime,” National Treasury said last year.
About a month after removal from the grey list, South Africa received an S&P Global credit rating upgrade, strengthening from BB- to BB with a positive outlook.
“The upgrade reflects South Africa’s improving growth and fiscal trajectory, alongside the reduction in contingent liabilities largely tied to performance improvements at the state-owned electricity utility, Eskom.
“The government is on track to post its third annual primary surplus [revenue minus expenditure, excluding interest payments on debt] in fiscal 2025 [year ending March 31, 2026], while contingent liabilities are likely to ease as state-owned electricity utility, Eskom, is being reformed. Eskom has posted its first profit in eight years and is therefore likely to require less financial support going forward,” the institution said.
In response, Treasury welcomed the ratings bump – the first in more than 16 years.
“South Africa is one of just three countries globally to secure an S&P upgrade in 2025, while continuing to maintain a positive outlook after the rating revision.
“Government is improving the health of the public finances and accelerating infrastructure investments. Over the medium term this will strengthen growth prospects, reduce borrowing costs, improve confidence and foster faster job creation.
“Raising South Africa’s growth trajectory depends on continuing to strengthen macroeconomic stability, accelerating structural reforms, building a capable state and improving public-sector infrastructure investment,” the department said at the time.
Collaborative efforts
In the State of the Nation Address on 12 February 2026, President Ramaphosa set the tone for the coming year – stating that the country is “stronger today than we were a year ago”.
“Our economy is growing again, and this growth is gathering pace. While we have experienced four consecutive quarters of GDP growth, we know that it has to grow much faster to meet our social and economic challenges.
“We have achieved two consecutive primary budget surpluses. Our credit rating has improved, interest rates are coming down and inflation is at its lowest level in twenty years. We are on a clear path to stabilising our national debt. The rand has strengthened against the dollar,” he said.
Now, the President, in reply to the SONA, urges citizens, government and the private sector to work together to propel the country and the economy even further.
“We don’t all have the same role, but every role matters. Some people plan. Some people lift. Some people reinforce. Some people spot the leaks early and fix them before they become disasters.
“When we build like that – patiently, practically, together – we don’t just complete a project. We create a “neighbourhood”: a place where others can thrive because we chose to cooperate.
“So let’s build like beavers: with urgency, with unity and with the quiet determination to make something strong enough to hold – something that lasts and something that shelters more than just ourselves. Let us be the real builders of South Africa, working together,” President Ramaphosa said. – SAnews.gov.za
