Fixed Investment Gap
South African economic growth requires more fixed investment to move past years of sluggish performance, former bank chief executive Marius Maree warned according to Business Insider Africa. The country faces a stark contrast between its long-term ambitions and current financial reality as it struggles to overcome a prolonged electricity crisis, corruption scandals, and rising business costs.
Government targets set in 2012 aimed to push fixed investment to 30% of gross domestic product by 2030 under the National Development Plan. That ratio has remained below 15%, Maree stated. Since President Cyril Ramaphosa took office in 2018 and initiated economic reforms, the economy has grown by an average of just 0.4%, Bloomberg reported.
“South Africa had little chance of achieving sustained economic growth without a significant increase in fixed investment,” Maree said.
Converting investment pledges into active projects continues to lag behind official goals. Out of roughly 1.5 trillion rand pledged since 2018, only 634 billion rand had actually flowed into the economy by March 2026, according to Business Insider Africa.
Renewable energy projects can attract private capital to other sectors
South Africa can draw practical lessons from its renewable-energy investment programme to draw more private capital into other critical sectors, Maree argued. Developing commercially viable projects with transparent regulations across ports, railways, and tourism industries could encourage institutional investors, pension funds, and large companies to commit capital.
Energy projects remain central to that expansion strategy. The country is pursuing a proposed 2.2 trillion rand, or $122 billion, energy investment programme backed by China, targeting 105 gigawatts of new generation capacity and 14,500 kilometers of transmission lines by 2039.
Efforts to secure foreign and domestic capital have targeted $116 billion in fresh investments over a five-year period. Approximately $36 billion of that total has already been channeled into manufacturing, energy, and logistics, Business Insider Africa reported.
Government and private sector must cooperate to reach growth targets
Closer cooperation between the government and the private sector remains vital to accelerating economic momentum, former finance minister Nhlanhla Nene stated. The National Treasury estimated in October that economic growth could reach 2% by the end of the decade.
Nene argued that the country needs a growth rate of at least 3% to create meaningful employment and improve living standards for its citizens.
Nene chairs the African unit of Italian research firm European House-Ambrosetti and collaborates with business executives on infrastructure and investment initiatives. “Our focus is on investment more than anything,” Nene said.
What questions do investors ask about South Africa's investment?
What percentage of GDP is South Africa’s current fixed investment?
The fixed investment ratio has remained below 15% of gross domestic product, falling far short of the 30% target set for 2030 in the National Development Plan.
How much capital has actually flowed from recent investment pledges?
Out of approximately 1.5 trillion rand pledged since 2018, only 634 billion rand had flowed into the economy by March 2026.
What level of economic growth is required to generate jobs?
Former finance minister Nhlanhla Nene said that South Africa needs growth of at least 3% to create meaningful employment and improve living standards.
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