South Africa’s turnaround is happening
While South Africa is currently navigating the chaos of yet another global disruption, it’s behaving like a ‘safe haven’, with reforms, better finances and an independent Reserve Bank lighting the way.
This is according to Business Leadership South Africa CEO, Busi Mavuso, who says that the sentiment in and towards the country in 2026 is very different to the last time it faced a global crisis.
Mavuso noted that, amid wars in the Middle East and Ukraine and the global rules-based system being challenged, things in South Africa feel different from the crises it has faced before.
“South Africa is facing these headwinds from a position of relative strength, with public finances in better shape than they have been in over a decade,” she said. “Structural reforms are beginning to show real results.”
The comparison is being made to six years ago, when the COVID-19 pandemic struck. At the time, South Africa’s national debt was “in genuine trouble”, and a sovereign crisis was a real risk, Mavuso said.
“We are not in that position today,” she said.
Despite the global turmoil, the rand has held up relatively well, as have South African bonds and equities.
The country is also benefiting from high global commodity prices, which are providing meaningful support.
The improvements in South Africa’s debt and general financial position have also been noticed by global ratings agencies and investors.
Moody’s has assigned a positive outlook to South Africa’s sovereign rating, and S&P Global has affirmed its positive outlook on the credit rating.
S&P’s affirmation followed Moody’s outlook upgrade a week prior, with both signalling growing confidence from international investors in South Africa’s fiscal stability and debt.
Both highlighted the country’s improving fiscal trajectory, continued primary budget surpluses and accelerating structural reforms as underpinning the improved sentiment.
Mavuso said that both these ratings could become outright upgrades if Finance Minister Enoch Godongwana holds course through to the October medium-term budget policy statement.
“The minister has shown the discipline and credibility to do so. The ratings agencies are watching. So are investors,” she said.
Navigating the storms
However, while South Africa is on more solid ground during the latest global fiasco, it does not mean it is immune to its pains.
Last week, the South African Reserve Bank (SARB) hiked interest rates for the first time since 2023, in a bid to get ahead of second-round effects and rising inflation stemming from the Iran War.
Economists now expect further hikes this year, with experts flagging the impact on economic growth—desperately needed to address crises like the country’s staggering unemployment rate.
Despite this, Mavuso said the SARB’s move to hike rates was the correct one.
“With inflation at 4% in April and the SARB projecting it will average 4.4% for the year, above its 3% target, the decisive response was essential,” she said.
“Price stability is critical to businesses’ ability to plan and invest. It also protects consumers, particularly the poor, who are most exposed when prices rise.”
Mavuso added that the Reserve Bank’s independence, free of political interference, remains one of South Africa’s most powerful signals to global investors.
Combined with the ongoing reforms and fiscal discipline, the country is now “behaving like a safe haven in the current environment,” she said.
“That is what years of reform and institutional discipline have bought us.”
Mavuso said that both the government and business have committed to a reform programme over the last eight years, and the economy is now seeing the payoff.
She said that businesses in the country will continue to press the government to hold the fiscal line, accelerate reforms, and deliver the capable state the economy needs.
“The rewards of doing so are not abstract – they show up in the rand, in bond yields, in investor confidence. We have earned that position, and we must not squander it,” she said.
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