The IMF’s April 2026 World Economic Outlook, Global Economy in the Shadow of War, makes worrying reading. It describes the world economy buckling under the weight of compounding shocks, with global growth revised down to 3.1% — well below the 3.7% historical average — as the closure of the Strait of Hormuz threatens a major energy crisis.
Headline inflation is already forecast at 4.4%, and in a severe scenario the IMF warns of near-recession conditions: global growth falling below 2%, a threshold breached only four times since 1980.
For the Global South — and Sub-Saharan Africa in particular — the picture is grimmer still. The world’s weakest economies are being asked to absorb the most severe shocks with the fewest tools.
South Africa is at the bottom of the list of all emerging markets and developing economies in terms of growth in 2026, at a projected 1%. Motorists felt the shock directly earlier this month when fuel prices surged by R3 and R7 per litre for petrol and diesel respectively, despite a temporary R3/l fuel levy cut.
South Africa has a genuine track record of competent short-term crisis management. During the financial crisis of 2008–09 the Reserve Bank cut rates by 450 basis points, fiscal policy was countercyclical, and the banking system held firm. During the Covid-19 pandemic the government deployed a relief package equivalent to 10% of GDP and executed the fastest large-scale social cash transfer in African history, reaching millions of previously uncovered citizens.
However, each crisis has left the country structurally weaker than before. Debt-to-GDP was 27% when the 2008 crisis hit. It was approaching 75% when the current shock arrived. The fiscal buffers that made the 2008 response possible no longer exist. The space that allowed Covid relief has been consumed.
South Africa has produced an impressive succession of economic framework acronyms — Gear, Asgisa, the NDP, the ERRP — each analytically sound but poorly implemented.
The experiences the ANC in government garnered in dealing with these crises will need to be drawn on for an effective response now. While the government of national unity (GNU) consists of many neophytes, the grizzled, experienced minsters can be trusted to ensure a response that acts in the interests of all South Africans.
It’s important that we look at how other countries are responding. India entered this crisis with 11 months of import cover in foreign exchange reserves, having aggressively rebuilt buffers in 2024–25. Brazil, a net energy exporter, has seen its 2026 growth forecast revised upward.
Indonesia deployed targeted fiscal tools — fuel compensation schemes and subsidies — drawing on a relatively healthy balance sheet. These countries prepared during the good years. South Africa, by contrast, spent the 2024–25 window managing GNU coalition tensions, especially around the budget.
African multilateral institutions have shown more ambition. The AU Commission, African Development Bank, UN Economic Commission on Africa and UN Development Programme jointly crafted the Abidjan Consensus in April 2026, a framework urging accelerated African Continental Free Trade Area (AfCFTA) operationalisation, diversified energy investment and the New African Financial Architecture. This is the kind of strategic thinking South Africa should be leading, not merely joining.
The government should use the convening power displayed during its chairing of the G20 to champion debt relief architecture for commodity importing developing nations, advance multilateral development bank reform, and table a commodity price stabilisation framework.
South Africa must continue to protect the independence of the Reserve Bank, maintain fiscal discipline, invest in energy security through renewables, and implement structural reforms under the AfCFTA framework. The Strait of Hormuz has made the just energy transition a national security imperative, not merely a climate obligation.
South Africa has the institutions, the intellectual capacity and the regional standing to respond with genuine strategic ambition. What it has consistently lacked is the political will to match the quality of its plans with the consistency of its implementation.
The differences between the ANC’s developmental instincts and the market orthodoxy of the DA and conservative allies cannot be an excuse for paralysis.
• Abba Omar is director of operations at the Mapungubwe Institute for Strategic Reflection.
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