While global headlines fixate on geopolitical volatility and trade fragmentation, South Africa faces a different reality. Our growth story hinges on closing structural gaps that have persisted for decades.
Infrastructure, digital connectivity and inclusive participation are the building blocks for growth in any society. In South Africa, weaknesses in these areas have become very real challenges defining whether millions of people will retire into stability or uncertainty.
For pension funds the question is no longer whether to act, but how to lead. These funds hold patient capital that can unlock growth and stability, but leadership that matters means more than delivering returns. Fiduciary duty must evolve beyond financial performance to include shaping the society members can retire into, through investments that build infrastructure, enable digital transformation and drive inclusion.
Infrastructure is the backbone of economic resilience
South Africa faces a R1.3-trillion infrastructure gap, while the continent requires $108bn annually to meet development needs. Ports, energy grids, transport networks and housing are the lifeblood of trade, jobs and social stability.
Yet despite regulatory permission, allocations to infrastructure are consistently low in Africa. In South Africa, regulation 28 opens the potential for 45% investment in infrastructure, but actual allocations are not even close to meeting that number.
This inertia is costly, and without decisive investment the African Continental Free Trade Area will never move past being a promise on paper, stalling any growth projections.
For pension funds such as the Government Employees Pension Fund (GEPF) infrastructure offers inflation-linked cash flows and stable returns that hedge against volatility. For example, the GEPF’s track record clearly highlights what is possible: investments have delivered 2,035MW of renewable energy, financed 93 housing projects and created 174,491 jobs.
Scaling this impact requires bold first-mover action and blended finance partnerships that derisk projects and crowd in private capital. The time for incremental steps has passed; 2026 must be the year of catalytic investment.
Digital transformation is the lifeblood of competitiveness
South Africa’s digital economy is growing, but the continent-wide potential, $712bn to GDP by 2050, can only be met if we have the infrastructure to support this growth. If we consider that only 37% of Africans are online, the urgency to invest in public infrastructure becomes undeniable.
To put this into perspective, if internet access were to increase to 75%, 44-million new jobs could be created over the next 15 years, adding more than $712bn to Africa’s GDP. The potential that comes with a connected economy has never been more within our reach, but it will only be realised if we act now with intention to build systems that empower participation.
The solution? Digital public infrastructure (DPI) — interoperable payment systems, digital identity platforms and data centres that enable secure, seamless transactions and unlock digital trade. These invisible systems are as critical as roads and bridges in creating the scaffolding for innovation.
For the GEPF financing DPI is a strategic and developmental imperative. It positions South Africa to leapfrog legacy systems and harness technologies such as AI and blockchain for inclusive growth. By allocating even 1% of assets to the digital economy, funds such as the GEPF can catalyse transformation that will reverberate across industries and generations.
Inclusion is the moral and economic imperative
What began as a visionary buzzword — diversity, equity and inclusion (DEI) — today is a market correction. Women-led MSMEs face a $1.7-trillion global financing gap, yet evidence shows DEI-focused investments outperform by up to 45 basis points, proving that inclusion is now a strategy.
For South Africa, where unemployment exceeds 11-million people, many of them youth, embedding DEI into investment decisions is the only pathway to inclusive growth. What does this mean? Channelling capital into impactful women-owned businesses, making sure under-represented voices can transition into leadership roles, and building ecosystems where marginalised groups can take hold of more opportunities. It also means setting clear benchmarks for progress that drive responsibility and accountability.
Pension funds have the power to make inclusion systemic. By setting measurable DEI targets and prioritising investments that expand access to education, healthcare and enterprise development, these funds can deliver returns while driving social progress. For the GEPF, this is central to its covenant of care ethos.
From promises to performance
The year ahead will continue to test the leadership of our country’s pension funds. The choices we will make will mean the difference between building resilient and inclusive economies or leaving millions vulnerable.
Infrastructure, technology and inclusion are no longer separate agendas. They are the interdependent pillars of a sustainable future filled with opportunity and shared prosperity.
The world is not waiting to build Africa’s infrastructure or its digital economy, and neither should we. With trillions in assets under management, South Africa’s pension funds hold the power to finance their own growth, design their own future and live by their own terms.
The fiduciary duty of tomorrow is clear: deliver returns, yes, but also deliver a country where dignity, opportunity and progress are lived realities for all.
• Mabesa is the principal executive officer of the Government Employees Pension Fund.
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