South African economic and institutional reform

South Africa is pursuing various economic and industrial reforms to stabilize its economy. Initial efforts focused on industrial policy, with President Cyril Ramaphosa signaling a potential shift toward allowing privately owned Special Economic Zones (SEZs) to address a shrinking manufacturing sector through improved incentives and simplified regulations. During this period, the retail sector also showed resilience, with real-term sales increasing by 3.7% in 2025.

By late 2026, the national focus evolved toward broader institutional reform and fiscal stabilization. The government adopted the ‘Weaver Work’ scenario from the Indlulamithi Scenarios 2035 framework for its Medium-Term Development Plan, emphasizing cooperation to rebuild institutions. While the country achieved milestones such as exiting the FATF greylist, receiving credit rating upgrades, and experiencing a prolonged period without load-shedding, significant challenges persist. These include high debt levels, unemployment exceeding 30%, and a projected GDP growth of 1.5% for 2026. Upcoming fiscal policy discussions are expected to prioritize managing the public sector wage bill and tax collections.