The one group that can fix South Africa
South Africa needs to empower its private sector to boost economic performance and reduce unemployment.
South Africa has struggled with a stagnating economy for more than a decade, with the GDP growing by 1.1% in 2025.
The growth is modest compared to other emerging economies, such as China and Brazil, which averaged 3.7% growth in the same year.
Economists are optimistic about the future, predicting that South Africa’s GDP growth could reach 1.6% in 2026, but this rise is still far below what is needed.
The poor economic performance has also led to high unemployment in South Africa, with the rate reaching 32.7% in the first three months of 2026.
The unemployment rate has been rising, as South Africa struggles to accommodate its growing workforce into its economy.
Efficient Wealth said these issues can be alleviated if the country’s government is willing to empower its private sector.
Private businesses are a major driver of economic growth and job creation, but weak investor confidence has made it difficult for them to grow.
Without investment, businesses cannot expand their operations or hire new employees, limiting job opportunities and contributing to the rising unemployment rate.
Recently, some global companies have expanded into enormous operations, outgrowing some countries.
Companies such as SpaceX and Microsoft have tremendous value and boost the United States’ economy by strengthening investor confidence.
Investment in these companies enables them to grow at a tremendous rate, creating jobs and infrastructure that support the country.
This boost could occur in South Africa, but the country’s private sector has not grown at the same rate as in other countries.
Efficient Wealth said this lack of investment in South Africa might not be due to business failures but to a lack of confidence in the government.
It said the country’s businesses may be capable of growing and competing on a global stage, but national failures could be holding them back.
No long-term solutions
To support its population, South Africa relies on social welfare schemes, but these initiatives will not create long-term growth, the investment experts said.
In 2024, roughly 40% of South African households relied on some form of social grant, including unemployment or pension schemes.
These initiatives help soften the economic hardships faced by many of the country’s citizens.
However, the social welfare programs are also costly, with the South African Social Security Agency (SASSA) being allocated a budget of R292.8 billion for the 2027 financial year.
Efficient Wealth said the heavy reliance on social grants is not creating long-term opportunities, as key failures are not being addressed.
“They cannot create sustainable prosperity when economic growth is weak, investment is hesitant, infrastructure is failing, and unemployment remains extraordinarily high,” it said.
It said South Africa needs to find ways to create more wealth in the country, instead of looking for different ways to divide the current wealth.
A key reason for the lack of growth in the private sector is unreliable, deteriorating public infrastructure, such as the country’s electricity grid.
Eskom has famously struggled to meet the country’s energy demands, leading to widespread loadshedding.
Load shedding has not been used in over a year, and its effect on businesses has been noticeable, with investor confidence rising.
This shows how investment in public infrastructure can support job creation and create economic growth.
Efficient Wealth said other systems, such as fintech, can further support the private sector by reducing reliance on traditional payment systems.
Fintech can lower costs for many small businesses and promote independence from traditional structures and government control.
This would allow freedom for businesses, leading to growth in the private sector and ultimately a healthier economic outlook for the country.
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