R1.27 trillion investment gap threatens South Africa’s growth ambitions

Johannesburg – South Africa needs an additional $75 billion (approximately R1.27 trillion) in annual investment to achieve its economic growth ambitions, as the country struggles to overcome years of weak economic performance, infrastructure constraints and declining investment.

According to Daily Investor, citing Bloomberg, former Standard Bank chief executive Jacko Maree said increased fixed investment was the only sustainable way to unlock long-term economic growth.

“Growth above all is what’s required,” Maree said in an interview on the sidelines of a conference in Johannesburg.

“There really is only one real long-term solution, and that is fixed investment,” he added.

Maree, who led Standard Bank from 1999 to 2013, also served as one of President Cyril Ramaphosa’s special investment envoys between 2018 and 2023.

South Africa’s economic performance has remained subdued despite government efforts to introduce structural reforms and attract investment. Economic output has grown by an average of just 0.4% since Ramaphosa took office in 2018.

Maree said fixed investment currently accounts for less than 15% of gross domestic product (GDP), significantly below the 30% target set by government in 2012 under the National Development Plan, which aimed to stimulate inclusive economic growth by 2030.

He argued that South Africa should build on the success of its renewable energy investment programme by creating bankable projects and clear investment frameworks across sectors such as ports, rail and tourism.

Such an approach could unlock funding from pension funds, large businesses and other private investors.

Former finance minister Nhlanhla Nene also stressed the importance of closer cooperation between government and business in addressing the country’s economic challenges.

According to Daily Investor, National Treasury estimates that the economy could grow by 2% towards the end of the decade. However, Nene believes growth of at least 3% is necessary to create meaningful employment opportunities and improve living standards.

The concerns come as South Africa continues to grapple with challenges in delivering major infrastructure projects despite substantial government spending commitments.

In an October report, Business Day reported that only 433 of 2,549 government infrastructure tenders advertised in 2025 had been awarded, representing approximately 17%.

Business Leadership South Africa chief executive Busi Mavuso warned that public infrastructure budgets were failing to translate into actual projects.

“The problem is that those public sector budgets are just not translating into live projects,” she said.

Infrastructure South Africa identified inadequate project preparation, incomplete feasibility studies, limited technical capacity and funding constraints among the obstacles delaying infrastructure delivery.

Meanwhile, the government’s 2026 Budget Speech, delivered by Finance Minister Enoch Godongwana, allocated an estimated R1.07 trillion towards public-sector infrastructure spending over the next three years.

The investment is expected to support transport, logistics, energy, water and other infrastructure projects.

However, the figures underline the challenge facing South Africa: attracting sufficient private investment while ensuring that existing public infrastructure commitments translate into projects capable of supporting sustainable economic growth and job creation.

Follow African Insider on Facebook, X and Instagram

For more African news, visit Africaninsider.com