South African Economic Development is Slowly Turning the Tide But Political Dangers Still Amass

By Mphuthumi Ntabeni

For much of the past decade, South Africans have been caught between despair and déjà vu. Power cuts darkened homes and factories, freight trains rusted on their rails, and the nation’s fiscal health seemed terminally ill. “State failure” entered dinner-table conversation as comfortably as “loadshedding.” Yet, amid the gloom, something has begun to stir. After ten years of economic regression, early signs suggest South Africa may, finally, be turning the corner.

Between 2014 and 2024, South Africa’s economy shrank in both moral and material terms. Growth collapsed to an average of 0.7%, and GDP per capita fell by a third. Debt ballooned to nearly 80% of GDP. Eskom failed to supply reliable electricity; Transnet’s ports and rail lines seized up; municipalities teetered on collapse. For many, it felt like the unravelling of a state.

Yet South Africa’s decline was not merely about local incompetence. It mirrored what the G20 Extraordinary Committee of Independent Experts on Global Inequality recently described as the “disequilibrating forces” of the world economy: the weakening of labour’s power, the rise of rentier capital, and the regulatory capture of states by elites. Deregulation, privatisation, and global financial liberalisation had, over three decades, structurally tilted the world economy toward capital and away from workers, deepening inequality and weakening public investment. South Africa’s decade of decline was a textbook case of those forces at work.

 The inflection began quietly. In 2019, then-finance minister Tito Mboweni’s Treasury published a little-noticed discussion paper advocating liberalisation of network industries and private participation in energy and logistics. Though nothing about it was revolutionary pro poor and more on the bureaucratic side, it planted a seed of rising economic development. When the pandemic hit, and the fiscal ceiling began to crack, its proposals were resurrected within the Economic Reconstruction and Recovery Plan (ERRP).

To turn the paper into progress, the Presidency and Treasury created Operation Vulindlela, a joint delivery unit to cut red tape and accelerate structural reform. Business joined in, forming a coalition of over 160 CEOs representing R11 trillion in market capitalisation, aligning with government on four national priorities: energy, logistics, crime and corruption, and youth unemployment. The outcome, while fragile, has been visibly positive.

In 2023, South Africa endured more than 200 days of severe loadshedding; Eskom’s energy-availability factor hovered at 51%. Today, it sits above 70%. For the first time in a decade, the lights have stayed on for months at a time. The Electricity Regulation Amendment Act of 2024 broke Eskom’s monopoly and created a framework for a competitive electricity market. Over 16 GW of private power capacity has been registered, with more than R400 billion in investment committed.

A staggering 220 GW of renewable projects are in development. While not all will materialise, the private-sector-led transition marks a structural break from the rent-seeking state monopolies that, as the G20 report observed had globally “privatised profits while socialising losses.”

In logistics, progress is slower but real. Port delays have dropped from three weeks to two days. Freight-rail volumes are recovering after years of decline, helped by public-private partnerships and new port concessions. Water reform has begun to address losses that once exceeded 40% of treated supply. Treasury is reporting strong revenue collection. And its National Water and Sanitation Master Plan aims to leverage R900 billion in private investment by 2030. This will also be a test of whether market collaboration can deliver social goods without repeating the inequality-amplifying privatisations condemned in the G20 report.

South Africa remains the world’s most unequal society. Here the G20 Committee’s conclusions are instructive. Inequality, it argues, stems from three forces:

• Predistribution failures: Asset ownership, access to skills, and political connections determine who benefits from growth.
• Redistribution failures: A regressive tax base, reliance on VAT, and underfunded social programmes perpetuate exclusion.
• Global asymmetries: Intellectual-property regimes, volatile capital flows, and trade rules continue to disadvantage the Global South as a modern echo of colonial extraction.

Treasury’s recent budget, with its shift toward progressive income taxation and expanded infrastructure grants, represents an attempt, however modest, to rebalance these forces. Yet South Africa cannot reverse inequality through redistribution alone; it must urgently and radically democratise opportunity also.

 The G20 report’s proposed International Panel on Inequality (IPI), which is inspired by the IPCC, is expected to be inaugurated under South Africa’s G20 Presidency. Its goal is to provide data, analysis, and policy advice on inequality’s global drivers, from tax avoidance to intellectual-property regimes. Pretoria has quietly lobbied to host the Panel’s secretariat in Johannesburg, positioning the country as a moral and analytical hub for the global inequality agenda. This role is consistent with its reform path. If successful, this initiative could help recast South Africa as a laboratory for equitable development in a post-neoliberal world. 

There is no denying the fact that the Government of National Unity has stabilised policy, but risks paralysis due to political opportunism. Populist factions within the ANC warn that they will not tolerate reforms that empower capital over people. Yet, as the G20 warns, the real danger is in the entrenchment of elites who shape policy “to preserve their rents while eroding social trust.”

Against this backdrop, the recent circulating letter urging President Cyril Ramaphosa to step down after G20 is to me a fools’ errand, probably instigated and penned by the rent seeker elites within the Anc. President Ramaphosa’s bold, even dismissive challenge that the ANC’s National Executive Council should formally ask him to resign if they dare, reveals the growing contrast to progressive development by the corrupt elite of the ANC. It is political theatre masquerading as principle. The President’s response — essentially, “If you want me gone, do it properly and publicly,” exposed the manipulative tendencies of the letter’s authors and the factional gamesmanship that has long sabotaged governance. It is also the best demonstration that Ramaphosa, with all the revelations of Mandlanga Commission, has turned the tide against the corrupt elites within the government and the ruling party.

While some still traffic in melodrama, Ramaphosa has chosen an unglamorous path: incrementalism, institutional clean-up, and a rediscovery of pragmatic cooperation between state and market. His strength is precisely that he does not rely on bombast, charisma, or passé ideological heroics. He is dragging the country, by hook, crook, and procedural persistence, into a more functional direction. That, in this era of global democratic backsliding, is no small achievement. 

The economy remains sluggish, expanding below 1%. The Bureau for Economic Research projects a gradual rise to 1.7% by 2027, just slightly above population growth. The lag reflects the time it takes for structural reforms to feed into investment confidence, but the flywheel is turning, even if still weighed down by the past, especially one under the Jacob Zuma State Capture years. In fact, I would not be surprised if somehow Zuma has direct influence over the penmanship of the current letter asking for Ramaphosa’s resignation.

South Africa’s story has always defied linearity. The first two decades of democracy brought growth and optimism; the next, corruption and decay. Now, under the much-maligned Ramaphosa, the pendulum appears to be swinging back.

In global terms, South Africa is not an outlier but a frontline case study of what the G20 report calls the “repoliticisation of inequality.” It is where the abstract forces of deregulation, globalisation, and fiscal austerity collide with human reality, and where, perhaps, the beginnings of a new developmental consensus are being forged.

It may still be too early to declare victory. But for the first time in a decade, South Africa’s problems look structural in ways that can be fixed, and not metaphysical, as if cursed. If inequality, as the G20 experts say, is a policy choice, then South Africa may at last be learning to choose differently.