{"id":851179,"date":"2026-02-17T09:00:00","date_gmt":"2026-02-17T07:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=851179"},"modified":"2026-02-17T08:23:21","modified_gmt":"2026-02-17T06:23:21","slug":"failed-state-reality-check-for-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/851179\/failed-state-reality-check-for-south-africa\/","title":{"rendered":"Failed state reality check for South Africa"},"content":{"rendered":"\n

The economic and political prospects for South Africa are turning a corner, pulling away from the path that many had warned would lead to a failed state.<\/p>\n\n\n\n

Following months of positive news and sentiment around South Africa, economists and analysts are leaning into forecasts that show the country on a much better path than a year ago.<\/p>\n\n\n\n

A stronger rand, economic growth on an upward trajectory, ratings upgrades, removal from the FATF growth list, lower interest rates\u2014with more cuts to come\u2014all these things have markets brimming with positivity.<\/p>\n\n\n\n

While the same experts will be quick to warn that these things do not mean all is well\u2014growth is still lacklustre, unemployment remains high, and policy reforms are moving at a snail’s pace\u2014the tone has shifted completely.<\/p>\n\n\n\n

Just two years ago, in 2023, alarm bells were ringing that South Africa was becoming a failed state. Some had even posited that the country was already there<\/strong><\/a>.<\/p>\n\n\n\n

At the heart of the claim were the country’s collapsing municipalities, widespread load shedding at the time, and a government that was dithering on policy reforms and measures to tackle unemployment and poverty.<\/p>\n\n\n\n

In 2024, ahead of the National Elections, rubber-stamped policies like the NHI and revelations of widespread state corruption rooted the perceptions and sentiment that the country was headed towards failure.<\/strong><\/a><\/p>\n\n\n\n

Following the elections, a semblance of hope was restored with the formation of the Government of National Unity (GNU)\u2014however, South Africa’s political reality quickly set in by early 2025 when the coalition came close to collapsing over the 2025 budget.<\/p>\n\n\n\n

2025’s tensions were compounded by multiple failures in foreign policy, including external pressures from the Trump administration.<\/p>\n\n\n\n

The Fragile States Index by the US think tank Fund for Peace attempts to quantify the risk of a state failing by examining indicators across social, political, and economic sectors. <\/p>\n\n\n\n

In the 2024\/25 edition, it ranked South Africa 80th out of 179\u2014a higher ranking, indicating greater fragility\u2014far from its best position at 132nd in 2007.<\/p>\n\n\n\n

However, by the time the second half of 2025 began, things started shifting.<\/p>\n\n\n\n

Turning the corner<\/h2>\n\n\n\n
\"\"<\/a>
Symmetry investment strategist Izak Odendaal<\/figcaption><\/figure>\n\n\n\n

According to Symmetry strategist Izak Odendaal, there are clear signs that South Africa is turning a wide corner and steering away from talk of a failed state.<\/p>\n\n\n\n

Citing President Cyril Ramaphosa’s latest State of the Nation Address (SONA), he said that the country is littered with good news and positive trajectories\u2014even though it’s not exactly smooth sailing.<\/p>\n\n\n\n

“It wasn\u2019t that long ago that some commentators wrote the country off as a failed state. Now, however, the president correctly closed his speech by noting that it was turning the corner,” he said.<\/p>\n\n\n\n

“Whereas previous versions of SONA were mostly a list of promises of things to be done, this year the president could report on real progress.”<\/p>\n\n\n\n

On top of the removal from the grey list and credit rating upgrade, South Africa has seen a strong performance in financial markets despite external pressures.<\/p>\n\n\n\n

“It is also an achievement, partly due to (Ramaphosa’s) own leadership, that the governing coalition survives,” he added.<\/p>\n\n\n\n

Cooperation between parties in the GNU, as well as between the GNU and businesses, has been fundamental to the positive sentiment, Odendaal said.<\/p>\n\n\n\n

“The government opening space for private sector involvement in areas it previously controlled tightly is a very important shift in approach.”<\/p>\n\n\n\n

However, the reality is that South Africa is only turning a corner; it hasn’t made the turn just yet. And for this, much more needs to be done.<\/p>\n\n\n\n

Municipalities are still failing; crime and corruption are still widespread; the electricity grid is stable, but pricing remains a major pressure point; and the government continues to fumble foreign policy.<\/p>\n\n\n\n

Alongside the list of accomplishments, the president included a lengthy to-do list of reforms to take place. <\/p>\n\n\n\n

Unfortunately, the government has a reputation for making good policies but struggles to implement them.<\/p>\n\n\n\n

“More specifically, it is good at macroeconomic policies\u2014led by Treasury and the Reserve Bank\u2014but it is often let down by microeconomic or sector-level policies, and massively by local government performance,” Odendaal said.<\/p>\n\n\n\n

Macroeconomic stability goes some way towards enabling a growth-friendly environment, but for the economy to truly perform, micro-obstacles must be removed and sensible sector-specific support provided.<\/p>\n\n\n\n

“Nonetheless, there is reason to believe that the country is turning the corner,” the expert noted.<\/p>\n\n\n\n

“Progress is never in a straight line, and there are domestic and international risks to the outlook \u2013 as always \u2013 but an improved economy and confidence should provide support for local bond and equity valuations over the medium term.”<\/p>\n","protected":false},"excerpt":{"rendered":"

The economic and political prospects for South Africa are turning a corner, pulling away from the path that many had warned would lead to a failed state.<\/p>\n","protected":false},"author":10,"featured_media":844227,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[4],"tags":[23334,19941,24759],"class_list":["post-851179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-failed-state","tag-izak-odendaal","tag-symmetry"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=851179"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851179\/revisions"}],"predecessor-version":[{"id":851190,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851179\/revisions\/851190"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/844227"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=851179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=851179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=851179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}