Source: Government of South Africa
South Africa’s economy is turning the corner
By Nomonde Mnukwa
As the year draws to a close and we stand on the threshold of a new year in 2026, the prevailing sentiment regarding our economy is one of confident optimism. Despite the formidable challenges our economy has navigated, we are now definitively turning the corner, accelerating towards a more stable and prosperous economic future.
It’s our spirit of never giving up and ingenuity that has made it possible for us to rise above recent hard times. Our ability to ‘make a plan,’ swiftly adapt to shifting circumstances, and pull together despite our differences is now paying dividends as we observe clear signs of a stronger economy.
In his recent address to the nation on South Africa’s successful hosting of the G20 Summit, President Cyril Rampahosa said: “Through the work we are doing together, we are beginning to see the green shoots of an emerging economic recovery. Unemployment has fallen in recent months. Our public finances are improving, allowing us to steadily reduce our national debt.”
The latest numbers show we have turned the corner towards a growth trajectory. For the first time since 2008, government debt is starting to level off. That means after years of borrowing more than we earned, we are changing direction and our country’s finances are getting healthier. Next year, debt is expected to stabilise at 77.9 per cent of gross domestic product (GDP).
This financial year, we project a primary budget surplus, which means we are no longer borrowing money just to cover day-to-day costs. By 2028/29, this surplus is expected to grow, freeing up more money to fund basic services like health care facilities and interventions to grow the economy to enable job creation.
With the 7th administration’s no one priority being job creation, in the third quarter of 2025, more than 248,000 new jobs were created. The total employment is now over 17.1 million, marking the highest level recorded this year and confirming our steady path to full economic recovery. In a country where unemployment hurts so many families, these new jobs change lives and bring real hope.
The economy has posted its fourth straight gain with gross domestic product (GDP) expanding 0.5 per cent in the third quarter of the year, signalling an economy that is stabilising and beginning to build resilience. Importantly, the growth was broad-based with mining, agriculture, trade, retail and accommodation all contributing positively which demonstrates that our economic recovery is taking root across multiple sectors rather than relying on a single driver.
The agribusiness confidence also bounced back in the final quarter of the year, rising by five points to 67 in the Agbiz/IDC Agribusiness Confidence Index (ACI).
Furthermore, initiatives such as the Youth Employment Service (YES) have to date, placed over 202 558 young South Africans in 12-month quality work experiences. The initiative which is enabled by more than 1 900 corporate partners has become a key driver of South Africa’s economic transformation, focusing on digital and technological skills development.
The upward trend provides a solid foundation for stronger performance ahead, signalling renewed confidence and laying groundwork for deeper investment, job creation, and long-term economic renewal.
One of the clearest signs that things are improving came from S&P Global Ratings which recently upgraded South Africa’s outlook. For investors around the world and domestically, this says our reforms and careful financial management is working. South Africa is becoming a place people want to invest in again.
Eskom continues to provide consistent energy supply with South Africa having experienced 169 consecutive days without load shedding during the second quarter of the current financial year.
This upward trend is not simply luck, but bold reforms that have set our economy on a new path. Through Operation Vulindlela we are fixing ports, speeding up new energy projects and cutting red tape, all of which are starting to deliver real results.
Structural changes like the establishment of a separate Transnet Rail Infrastructure Manager to manage the rail network while allowing for open access where private train operating companies (TOCs) can run their own trains, will bring about more competition, reducing costs, and ultimately shifting freight from road to rail.
As part of major rail reforms, 41 freight rail routes will be opened to 11 selected private Train Operating Companies and will result in rail volumes increasing from 160-million tons to 250-million tons by 2030.
Moreover, joint work between Transnet, police and private companies has cleared blockages, reopened routes and made freight movement faster and safer. Businesses are saving money, factories can produce more, and our exports are growing.
Keeping inflation under control means more money back in people’s pockets as price increases are kept in check. Government wants to bring inflation even lower and has tasked the Reserve Bank to keep inflation around 3 per cent, which will match the best-performing countries.
Furthermore, we have also been taken off the Financial Action Task Force (FATF) grey list. In just two and a half years, government kept its promise to tighten rules and enhanced our ability to combat illegal money flows. Being off the grey list improves our reputation, makes it easier to do business overseas and attracts more investors. It shows the world we are serious about good governance.
Our hosting the G20 Summit last month has been a game-changer for South Africa. The images of a safe, organised and vibrant South Africa went around the globe. Heads of State and Business leaders who flew in for the summit saw with their own eyes the world class infrastructure and our budding potential.
The progress we have made is real. Our strengths now outweigh the problems, and we are putting effort in fixing the remaining challenges with clear plans and teamwork.
While turning the corner is a big step, our journey is not finished, we must keep the momentum. Government, business, workers and communities all need to keep working together, supporting reforms, investing, innovating and making sure growth reaches every South African.
South Africa has entered a time of new possibility. If we stay united and keep pushing forward, the good signs we see today will grow into a strong, fair and thriving economy that works for all of us.
*Mnukwa is the Acting Director-General of the Government Communication and Information System (GCIS).
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