With SA’s unemployment at 33.2%, GDP growth languishing at 0.8% in quarter two of 2025 and mounting fiscal pressures, three pathways could indicate a future economic direction: the ANC’s 10-point economic plan, the National Treasury’s fiscal consolidation strategy and Nedlac’s social dialogue framework.
The dramatic recoveries of two very different economies suggest SA could be repeating both their successes and some of their limitations. Greece’s 2010 economic crisis was due to a perfect storm of years of fiscal mismanagement, structural weaknesses and the effect of the 2008 global financial crash, leading to widespread impoverishment and the country suffering the longest recession of any developed economy.
Sustained fiscal discipline, structural reforms, especially around the banking sector, and hefty doses of EU support ensured that by 2024 it reached a primary surplus of 4.8% of GDP and an overall budget surplus of 1.3% in that year. However, the trauma of more than a decade ago remains, while its level of unemployment remains high compared with the rest of the EU.
These same strategies came into play in Rwanda’s recovery after the 1994 genocide, which saw about 1-million lives lost, representing 15% of the population. Its GDP contracted by 50%, and 78% of its population fell into poverty. Rwanda’s GDP rose from $752m in 1994 to $9.5bn in 2018, registering average GDP growth of about 8% a year over two decades.
Astute use of overseas development aid, institution building such as improvements at the Development Bank of Rwanda and macroeconomic and microlevel policies, supported by strategic public investments and infrastructure projects (including special economic zones), have been cited as contributing to Rwanda’s spectacular success. However, the continued illiberalism of its democratic system and penchant for military interventions should be seriously addressed.
The ANC’s plan released in October by President Cyril Ramaphosa targets preferential electricity tariffs for ferrochrome, manganese and steel, fast-tracking 14,500km of new transmission lines and finalising chrome and manganese export tariffs while implementing defensive duties on dumped imports.
SA’s possible removal from the Financial Action Task Force greylist demonstrates what happens when political will, technical capacity and stakeholder alignment converge, thus strengthening the financial system and restoring investor confidence.
Building on the successes of Operation Vulindlela, the ANC plan proposes establishing an “economic war room” in the presidency to co-ordinate cross-government performance monitoring and publish regular scorecards on progress. We must ask whether centralised command and control is possible by a state drowning in its own red tape and compliance culture.
The plan acknowledges “weak capacity and fragmented co-ordination” as factors causing delays in infrastructure projects, promising to professionalise project management and establish cross-government co-ordination units.
The approach carries risks, with state capacity possibly the most critical, given the erosion we have seen over the past two decades.
Most critically, the plan is silent on fiscal sustainability. Writing in the Sunday Times, Treasury director-general Duncan Pieterse argued that the government is on track to show a growing primary budget surplus for the third consecutive year and plans to stabilise the debt-to-GDP ratio in this fiscal year, despite economic growth continuing to disappoint.
SA is beginning to see the fruit of the efforts of the past few years. Notwithstanding global headwinds, the rand is trading at R17.18/$ and benchmark yields are at 9.1%, reflecting improved confidence in SA’s fiscal position. SA possesses two other important ingredients: first, three decades of sustained social dialogue, exemplified by Nedlac, between government, business, labour and community organisations, representing a genuine competitive advantage.
Second, as reported in the Reserve Bank’s September quarterly bulletin, the amount of cash held by non-financial companies reached almost R2-trillion by July. Mobilising that could be akin to the €289bn injection that Greece received through the EU and IMF bailouts or the almost billions of dollars Rwanda received from a range of supporters, especially the US.
The steady implementation of largely agreed-to plans and the growth in trust through social dialogue could see all sectors contributing to the much-needed national effort.
• Abba Omar is director of operations at the Mapungubwe Institute.
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