South Africa’s economy is moving closer to a sustained recovery as structural reforms and improvements in governance begin to ease long-standing constraints on growth, Standard Bank Group’s chief economist said, projecting stronger expansion than the International Monetary Fund (IMF) over the next two years.
Goolam Ballim forecast Africa’s most industrialized economy to grow by 1.7% in 2027, above the IMF’s latest projection of 1.3%, before accelerating to 2% in 2028, according to remarks reported by Bloomberg.
“We’ll continue to incrementally build toward escape velocity,” Ballim said in an interview, adding that strengthening institutional capacity would be the key driver of growth above 2%.
South Africa has struggled with average economic growth of less than 1% over the past decade, weighed down by weak governance, corruption, electricity shortages, and inefficiencies in transport infrastructure.
Ballim said ongoing efforts to improve governance and restore the performance of key infrastructure, including electricity, ports, and railways, are beginning to support broader economic activity.
President Cyril Ramaphosa has also intensified efforts to strengthen the rule of law. Last year, he established the Madlanga Commission to investigate allegations that criminal syndicates had infiltrated the country’s justice system following claims made by a provincial police chief.
The commission’s final report, initially expected by the end of August, has been postponed until Nov. 16 after Ramaphosa extended its mandate, delaying the publication of potentially sensitive findings until after municipal elections scheduled for Nov. 4.
Despite exposing deep institutional weaknesses, Ballim said the inquiry could ultimately strengthen investor confidence by demonstrating a commitment to accountability and judicial reform.
“Aggregate governance is improving,” he said. “Capital is going to chase confidence. Confidence is going to hinge on the capacity for the rule of law to be substantial, predictable, and to hold.”
According to Standard Bank, nearly 70% of the structural reforms identified under Ramaphosa’s reform agenda launched in 2020 have either been completed or remain on track.
Ballim also said stronger growth in South Africa would have positive spillover effects across the region, estimating that every one percentage-point increase in South Africa’s gross domestic product could lift economic output across southern Africa by as much as 0.7%.
“If South Africa does well, the region does well,” Ballim 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.”
