A new policy road map from the World Bank underscores the importance of prioritising short-term, easily implementable measures to revitalise SA’s economy.
In the overview of the “Driving Inclusive Growth in SA” report, the lender states that the country is on the wrong growth trajectory, noting that real GDP per capita in 2023 was less than in 2007, the Gini coefficient remains high and unemployment sits at 31.9% — “one of the highest rates in the world”.
To address this, the report highlights two main drivers of growth. “Sweden in the 1990s was exhibiting similar signs of paralysis as SA today: slow growth (around 1.6%), high public debt (80% of GDP) and fairly high unemployment (10%),” it says.
The political incentives to jump-start reforms with feasible, impactful, and timely actions are enormous
— World Bank's Driving Inclusive Growth in SA report
“So, it switched to a new economic model. In less than five years, it reinvigorated its economy, doubling GDP growth to 3.1%, reducing unemployment to 6% and cutting public debt to 40% of GDP.”
Sweden achieved this by opening domestic markets to competition, streamlining regulations and narrowing the state’s role to essential public goods.
Drawing on their report, the World Bank argues that government officials should first invest their limited technical and financial resources in actions most likely to deliver quick gains, rather than attempt to tackle all economic challenges simultaneously.
The authors cite Operation Vulindlela — created in the presidency in 2019 — through which improvements in electricity services and the streamlining of visa applications serve as proof that targeted efforts can yield meaningful progress.
They explain that early wins can build public trust and political support, creating the runway for more extensive reforms later.
“The state has limited financial and technical capabilities to do everything at the same time,” the report notes, urging a selective approach that produces “the biggest positive results possible soon”.
In this spirit, the World Bank highlights several short-term “FIT actions,” each designed to be feasible, impactful and timely.
“These options are appealing to policymakers because they are fairly straightforward to execute. They do not require significant changes in the legal and institutional frameworks, which are complicated and time-consuming in SA’s political economy,” the report notes.
“Further, many of them do not require additional financing, important given the needed fiscal consolidation over the next few years, but they do require political will and vision.”
Examples include better co-ordination of public spending to avoid duplication, accelerating access to the power grid for renewable energy projects and opening up rail networks to multiple operators.
Critically, the Bank contends that boosting market competition and enhancing public institutions — identified as the two main drivers of meaningful change — will require careful sequencing.
In less than five years, [Sweden] reinvigorated its economy, doubling GDP growth to 3.1%, reducing unemployment to 6%, and cutting public debt to 40% of GDP.
— World Bank's Driving Inclusive Growth in SA report
Reforms in areas such as transport, urban development and social services must be synchronised to avoid wasting scarce resources. By consolidating efforts and leveraging digital tools, local governments can improve municipal services without overwhelming their capacity.
Yet the report also cautions that these short-term steps are not a substitute for deeper structural transformations, particularly regarding outdated labour policies and the dominance of state-owned enterprises.
Rather, they can serve as catalysts.
Once confidence is restored through tangible improvements — such as fewer power outages, more reliable rail freight and more efficient public spending — stakeholders may be more amenable to broader measures that extend beyond quick fixes.
The bank is clear that early policy successes help break political deadlock, open channels for public–private collaboration and reassure investors.
“And the political incentives to jump-start reforms with feasible, impactful and timely actions are enormous,” the report said — particularly in a context in which stalled growth has undermined public confidence and intensified socioeconomic pressures.
By capitalising on this critical window, the World Bank says SA could lay the groundwork for lasting prosperity in the years ahead.
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