At the start of the 2026 Investment Forum, we attended a compelling presentation by Kevin Lings, Chief Economist at Stanlib. The forum is one of South Africa’s leading thought leadership events for financial advisors and asset managers, bringing together more than 1,500 financial professionals, over 30 leading asset managers, and discretionary fund managers to explore investment ideas and broader macroeconomic trends.
This year’s forum focused on helping delegates cut through the market noise — particularly around artificial intelligence, geopolitical uncertainty, and inflation — while reminding investors of the importance of recurring market cycles.
Against that backdrop, Kevin Lings offered a clear and pragmatic view of South Africa’s economic position and, importantly, what needs to change for the country to achieve more sustainable growth.
A sobering growth reality
South Africa’s economic performance remains constrained. While short-term growth figures may move around, the broader trend is clear: over the past decade, GDP growth has averaged between 2% and 4%, well below what is needed to meaningfully reduce unemployment or improve living standards.
Even more concerning is South Africa’s low ranking in global investment metrics. Fixed investment as a percentage of GDP remains weak relative to peers, highlighting a structural challenge: the country is simply not investing enough to support stronger growth.
Investment: the missing ingredient
At the heart of South Africa’s growth challenge is insufficient capital formation. Economic growth is ultimately driven by investment in infrastructure, businesses, and productive capacity. There are some encouraging signs, particularly from the private sector. However, unlocking meaningful growth will require:
- Greater policy certainty
- Improved ease of doing business
- Stronger incentives for private sector expansion
Without a sustained increase in investment, economic growth is likely to remain subdued.
Infrastructure remains one of the most important factors shaping South Africa’s growth trajectory.
Recent developments suggest a gradual but important shift:
- Increased private sector participation in electricity generation, particularly in renewable energy.
- Expansion of rail capacity, with ambitious freight targets and growing private sector involvement.
- Periods of strong growth in the construction sector linked to infrastructure activity.
- Taken together, these developments point to a broader transition — from a state-led model toward a more collaborative, private sector-driven approach.
If executed successfully, infrastructure investment has the potential to unlock growth across multiple sectors, including mining, agriculture, and manufacturing.
Despite persistent domestic challenges, South Africa continues to attract significant foreign investment, particularly into its financial markets. Foreign ownership of government bonds remains high, and cumulative investment in listed equities has grown steadily over time. This reflects a level of confidence in South Africa’s financial system and capital markets. That said, much of this capital is portfolio-based rather than directed toward long-term productive investment. Increasing foreign direct investment — into businesses, infrastructure, and job-creating sectors — remains a key opportunity.
The savings gap
Another structural constraint is South Africa’s relatively low savings rate compared with both emerging and developed economies. Lower savings limit the country’s ability to fund investment internally, increasing reliance on foreign capital and exposing the economy to global volatility. Improving domestic savings — particularly through long-term investment vehicles — will be an important part of building a more resilient growth framework.
One of the clearest themes from the presentation was the evolving role of the private sector. South Africa is gradually shifting toward a more private sector-led growth model, particularly in areas such as energy and logistics. This shift may not be happening by design so much as by necessity — but it still represents a meaningful structural change in how the economy functions.
For South Africa to achieve higher and more sustainable economic growth, several key levers need to be addressed:
- Energy security: Continued expansion of generation capacity and improvement of the national grid.
- Logistics reform: Greater efficiency and private participation in rail and ports.
- Increased investment: Creating an environment that encourages both local and foreign capital deployment.
- Higher savings: Strengthening the domestic funding base for long-term growth.
- Public-private collaboration: Scaling partnerships to deliver critical infrastructure.
South Africa does not lack opportunity. The country has deep capital markets, a sophisticated financial system, and strong global investor participation. The real challenge is turning these strengths into productive, large-scale investments that can drive meaningful economic growth.
Written by Sigrid
