South Africa's Long-Stalled Economy Shows Signs of Recovery, Offering Hope to Struggling C

South Africa’s economy has grown at less than 1% annually for a decade, a stretch of stagnation that has cost ordinary citizens jobs, reliable services, and confidence in the institutions meant to serve them. That record may now be shifting.

Standard Bank Group’s chief economist Goolam Ballim projects growth of 1.7% in the coming year, rising to 2% in 2028, provided the country continues strengthening the governance structures that collapsed under years of corruption and mismanagement. Speaking to Bloomberg from Cape Town, Ballim was direct about what drives the outlook: “The foremost ingredient in this 2%-plus growth trajectory relates to institutional capacity.”

For households and businesses that endured years of rolling blackouts and gridlocked ports, the progress already recorded is tangible. Electricity generation and distribution have improved enough to ease supply constraints that disrupted daily life across the country. Efficiency gains at ports and railways have reduced the logistics bottlenecks that pushed up costs for consumers and hampered commerce. Nearly 70% of the structural reforms President Cyril Ramaphosa identified as priorities in 2020 are either completed or progressing on schedule.

Ballim’s forecast is more optimistic than the International Monetary Fund’s 2027 projection of 1.3% growth. The gap reflects his view that South Africa is beginning to escape the drag of a decade of underperformance, incrementally building what he calls “escape velocity.”

Meanwhile, a separate process is testing the durability of those institutional gains. Ramaphosa established a judicial commission last year to investigate criminal networks that have penetrated South Africa’s justice system, following allegations from the police chief in KwaZulu-Natal province. The inquiry, known as the Madlanga Commission, was originally due to conclude at the end of August but was extended to November 16, pushing its findings past the municipal elections on November 4.

The delay matters to citizens waiting to see whether accountability follows exposure. Ballim, though, frames the commission’s work as potentially restorative rather than merely disruptive. “Aggregate governance is improving,” he said. The exposure of corruption networks, however uncomfortable, could prove “cathartic” and help rebuild the public trust that sustained investment requires. “Capital is going to chase confidence,” he added. “Confidence is going to hinge on the capacity for the rule of law to be substantial, predictable, and to hold.”

The consequences of getting this right extend well beyond South Africa’s own borders. Ballim estimates that for every percentage point increase in South African GDP, gross domestic product across the southern African region could rise by as much as 0.7%. “If South Africa does well, the region does well,” he said. “If there is one region that can really turn its dial, and turn the dial for the rest of sub-Saharan Africa, it is southern Africa, with South Africa at its core.”

That regional multiplier effect means the everyday stakes, jobs, infrastructure, economic opportunity, are shared across millions of people in neighboring countries who have no direct say in South Africa’s reform process. Whether the Madlanga Commission’s eventual findings translate into genuine accountability, and whether institutional momentum holds through an election period, will do much to answer whether this recovery is durable or fragile.