South Africa: Towards a Change of Course?

As South Africa faces major challenges—including chronic underinvestment, the inefficiency of state-owned enterprises, inadequate infrastructure, limited financial inclusion, persistently high unemployment, and inequalities rooted in the legacy of apartheid—its growth trajectory remains modest, insufficiently inclusive, and constrained by enduring structural weaknesses. Against this backdrop, the reforms recently undertaken may signal a turning point. In particular, the Operation Vulindlela programme, notably in the electricity, transport, and economic governance sectors, has contributed to strengthening the macroeconomic framework through enhanced monetary policy credibility, gradual fiscal consolidation, South Africa's removal from the FATF grey list, and renewed investor confidence. Nevertheless, these improvements remain fragile in the face of external risks, particularly rising energy prices driven by geopolitical tensions.