The Bureau for Economic Research (BER) has shone the spotlight on South Africa’s reform agenda, saying the government of national unity (GNU) should deliver on service delivery infrastructure, protect existing institutions and build coalition coherence around a shared reform scorecard if it is to realise sustained economic growth.
And the unemployment crisis makes the case for reform urgent and the potential payoff enormous, it said.
In the research note prepared for BER by Johan Fourie, chair of economics, history and policy at Stellenbosch University, the BER says Poland doubled its GDP per capita in the 20 years after its 1992 reform onset while South Africa’s per capita income “has barely grown in two decades”.
The paper examined five countries ― including Chile, Poland, India, Germany and Argentina ― “that faced critical junctures where coalition dynamics and reform trajectories diverged”.
“Three lessons emerge for South Africa’s GNU. Crises create reform windows, but only credible political settlements translate those windows into sustained investment and growth.
“Reform sequencing matters ― infrastructure first, labour later. And institutional anchoring and coalition coherence determine whether reforms survive beyond the government that enacted them.
“Applied to the GNU, these lessons point to a clear prescription: deliver visibly on infrastructure, protect existing institutions and build coalition coherence around a shared reform scorecard.”
The government has hailed progress in implementing Operation Vulindlela, a joint initiative between the presidency and the Treasury, in October 2020, aimed at accelerating structural reforms to drive rapid, inclusive economic growth, job creation and improved service delivery.
In February, Business Leadership South Africa (BLSA), an umbrella body representing most of the country’s largest listed companies, said South Africa’s reform agenda remained on a positive trajectory, showing measurable progress across economic, criminal justice and governance streams.
Reform score
The overall reform score rose to 23.7% from May 2024 after a 2.3% increase for the quarter between September 2025 and December 2025, according to the BLSA reform tracker, which went live in March 2024, and is aimed at monitoring progress in the implementation of critical reforms, which businesses said had been effective over the past 12 months.
The research note “asks what political conditions enable sustained economic growth”. It notes that successful reformers start with “high-visibility, broadly beneficial reforms that build political capital and defer the most politically costly changes until a growth dividend materialises”.
“Reforms survive beyond the government that enacted them only when institutional constraints make reversal costly and the coalition maintains operational coherence around a focal programme.”
GDP per capita in Chile, which was crippled by a banking crisis in 1982/83, fell nearly 19% and recovery came in two phases: fiscal consolidation and export promotion.
In Argentina the political settlement unravelled: “Reforms were reversed, institutions weakened and growth collapsed.”
In India the paper states that reform proceeded by “stealth tariff cuts and deregulation via executive discretion, without a formal parliamentary mandate. Growth rose from around 3% to above 5%. India’s federal institutions — independent courts, a free press, competitive elections — provided veto points that enhanced credibility even under fragmented coalitions.”
In Germany, which was characterised as the “sick man of Europe” in the early 2000s, reforms in 2003–05 restructured unemployment insurance, tightened job-search requirements and created new categories of low-threshold employment. This caused unemployment to be halved from 11% to 5% with 2.5-million jobs created.
Ultimate test
The paper says the ultimate test of a growth coalition is jobs. “Unemployment trajectories for Poland, Germany and South Africa, centred on the reform onset. The pattern is unmistakable: in both successful cases unemployment fell dramatically — Poland from above 20% to around 7% and Germany from 11% to 5%,” it says.
“South Africa, at above 32% on the narrow definition and above 42% on the expanded definition, starts from a position far worse than any comparator’s worst point. The scale of South Africa’s unemployment crisis makes the case for reform urgent and the potential payoff enormous. If Poland could halve unemployment in a decade through sustained reform, the potential for South Africa is transformative.”
The BER calls on the GNU to deliver on energy, water and logistics infrastructure to build credibility and reduce policy uncertainty; agree on a shared reform scorecard that all coalition partners endorse publicly and report progress regularly; and protect and repair institutions such as the South African Reserve Bank, the National Treasury, National Prosecuting Authority and Chapter 9 institutions, because “these are the commitment devices that make the coalition’s bargain credible beyond the current electoral cycle”.
The GNU has to defer “politically divisive reforms until the growth dividend from infrastructure delivery creates fiscal and political space — but do not defer indefinitely”.
The GNU, often characterised by critics as a grand coalition between the ANC and the DA, has faced internal disagreements over several policy areas. These include the implementation of the National Health Insurance Act, the Basic Education Laws Amendment (Bela) Act, and aspects of South Africa’s foreign policy, particularly its stance toward the US and its ally Israel.
“What the lessons offer is a structured way of thinking about the political prerequisites for growth: a lens for assessing whether the GNU is on a path toward prosperity or stagnation,” the BER says.
Efficient Group chief economist Dawie Roodt said the economy had been stagnating for several years and the projected 1.6% economic growth for 2026 would not be realised due to the war in the Middle East.
“If you compare South Africa to poorer countries in the world they are catching up with us and overtaking us. We have a crisis in South Africa. Clearly, the markets are concerned about the GNU, which has been in place for two years but has not delivered much. I agree with the BER; we need to pull up our socks,” Roodt said.
Stanlib chief economist Kevin Lings said South Africa needs more fixed investments. “Obviously, a lot of that needs to be infrastructure focused, we won’t get broad-based private sector investment if that is not adequate,” he said.
“Clearly, we made gains in some areas. We need implementation of the policy reforms to be much more extensive. There needs to be some acknowledgement that a lot has been done already. It’s not like nothing’s been done.”
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