THE IMPROVED ECONOMIC ENVIRONMENT IS AN OPPORTUNITY… USE IT OR LOSE IT

This briefing note from the Institute for Economic Justice (IEJ) argues that while South Africa has seen modest economic improvements in 2025, including better public finances and stabilized network industries, these gains have not translated into reduced poverty, hunger, or unemployment. The IEJ urges President Ramaphosa to use this window of opportunity to implement a state-led structural transformation focused on job-intensive growth, expanded social services, and a developmental macroeconomic framework, rather than relying on marginal reforms or private-sector-led investment.

• South Africa's economy showed modest growth in 2025, with a projected expansion of 1.2%, driven by resilience in mining, agriculture, trade, and finance. However, GDP per capita remains lower than the 2010 baseline established when the National Development Plan (NDP) was adopted.
• Improvements in 'network industries'—energy, freight rail, and ports—have supported the economy. Electricity availability improved as most of the country avoided loadshedding for much of 2025, and Transnet reported a 4.4% increase in rail volume to 81.4 metric tons in the six months ending September 2025.
• Despite economic resilience, unemployment remains critical. The official unemployment rate was 31.9% (over 8 million people) by September 2025, while the expanded unemployment rate reached 42.4% (12.5 million people). Additionally, 40% to 45% of young people are categorized as not in employment, education, or training (NEET).
• Poverty and food insecurity have worsened. Two-thirds of the population (66.7% or 40.8 million people) now live above the upper-bound poverty line as of 2023. Between 2019 and 2023, the number of severely food-insecure people rose by 2.8 million to a total of 8 million.
• Social grants are insufficient to eradicate hunger. The child support grant of R560 is below the calculated cost of a basic nutritious diet (R948.18), and the SRD grant (R370) is less than 44% of the food poverty line.
• Women face disproportionate economic constraints due to unpaid care work; the narrow unemployment rate for women is 35.9%. In Q2 2025, women were eight times more likely than men to be 'homemakers' not in the formal labour force.
• Investment levels are inadequate for sustained growth. In 2025, the investment rate fell below 15%, which is significantly lower than the 20% to 25% typically required. The projected R1 trillion in medium-term infrastructure spending is far below the R800 billion per year needed to meet NDP targets.
• The IEJ proposes a developmental macroeconomic framework including a dual policy rate regime by the South African Reserve Bank (SARB) to provide lower-priced credit for developmental investment and the recapitalization of the DBSA, IDC, and public banks.

APA

Institute for Economic Justice (2026). THE IMPROVED ECONOMIC ENVIRONMENT IS AN OPPORTUNITY… USE IT OR LOSE IT. https://iej.org.za/wp-content/uploads/2026/02/IEJ-Briefing-Note-SONA-2026-13-February-2026.pdf

Chicago

Institute for Economic Justice. THE IMPROVED ECONOMIC ENVIRONMENT IS AN OPPORTUNITY… USE IT OR LOSE IT. 2026. https://iej.org.za/wp-content/uploads/2026/02/IEJ-Briefing-Note-SONA-2026-13-February-2026.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=THE IMPROVED ECONOMIC ENVIRONMENT IS AN OPPORTUNITY… USE IT OR LOSE IT |date=13 February 2026 |url=https://iej.org.za/wp-content/uploads/2026/02/IEJ-Briefing-Note-SONA-2026-13-February-2026.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2026improved, author = {{Institute for Economic Justice}}, title = {{THE IMPROVED ECONOMIC ENVIRONMENT IS AN OPPORTUNITY… USE IT OR LOSE IT}}, institution = {Institute for Economic Justice}, year = {2026}, month = feb, url = {https://iej.org.za/wp-content/uploads/2026/02/IEJ-Briefing-Note-SONA-2026-13-February-2026.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }