At the end of last year I researched the 10 most important ‘past’ developments in SA during 2025. It was largely positive focusing on our removal from Grey listing; a renewed commitment to infrastructure build; the strength of the Rand; the success of Operation Vulindlela; youth employment initiatives, lowering inflation, and the like.
So what do new need to look out for as ‘likely’ in 2026?
Remember, I also urged you to read “Why Nations Fail” https://www.sagoodnews.co.za/why-nations-fail-the-origins-of-power-prosperity-and-poverty-by-steuart-pennington/ and the importance of Extractive vs Inclusive institutions in the building of a successful state. (Example: witness ANC Secretary General Minister Mbalula recently calling for the nationalising of the Reserve Bank and the push for EWC as classical examples of the failing political elite’s desire for extraction!)
During 2026 we need to interpret developments in this ‘extractive vs inclusive’ context. As the ANC continues to fail it is going to continue to extract; the critical question is, will the public, having endured 30 years of ‘extraction’, vote for parties that will stop this?
(In my comments below the wording in italics is intended to re-enforce this point)
- Municipal Elections and Political Shifts
South Africa will hold local government elections between November 2026 and February 2027, which will be the first test of political sentiment after the 2024 national vote that saw the ANC lose its outright majority. These elections are widely seen as a referendum on service delivery failures (i.e. extraction, councils stealing), especially water, electricity, waste management, and roads; and could significantly alter council control in key metros like Johannesburg, Cape Town, Pretoria and eThekwini. Political fragmentation and coalition negotiations could intensify as parties such as the DA, EFF, IFP and new groupings like Unite for Change seek leverage at the local level (hopefully leverage to focus on inclusivity)
- Economic Growth and Monetary Policy
The economy is expected to expand modestly in 2026, with GDP growth forecasts around 1.3–1.4%. Continued low inflation, anchored near the South African Reserve Bank’s new 3% target, may allow further interest rate cuts, easing financial pressure on households and businesses. However, growth remains constrained by structural issues like ‘official’ unemployment (above 30%); (excludes the 8 million employed in the informal sector), weak investment, and logistical bottlenecks.
- Fiscal and Structural Reforms
Government efforts to unlock growth will continue through agendas like Phase II of Operation Vulindlela, which targets reforms in conjunction with Business 4 South Africa (B4SA) in energy, logistics, water and digital infrastructure to attract investment and improve productivity. Expanded public-private partnerships in transport, rail, and port freight systems are also expected to advance (The growing incidence of public-private partnerships is a very encouraging inclusivity signal – will we become more of a ‘partnership state’ than a ‘developmental state’ as dictated by the dated National Democratic Revolution?)
- Infrastructure Investment and World Bank Support
International financing will play a big role in South Africa’s infrastructure development. A $1.5 billion World Bank loan is earmarked for transport, power, water and sanitation upgrades, easing key bottlenecks that have hindered economic growth. In addition, discussions are underway for another $500 million support package to improve the national transmission grid, critical for stabilising energy supply and connecting renewable power. It is critical that inclusive public-private partnership be engaged in the spend this money.
- Energy Market Reforms and Industry Support
To address high electricity costs and supply constraints, South Africa has eased anti-trust rules, allowing firms to collaborate on energy procurement and infrastructure projects. This aims to relieve industrial pressure and support energy-intensive sectors. Continued Eskom reforms and grid improvements will be crucial to advancing economic activity in 2026.
- Foreign Policy and Geopolitical Balancing
South Africa’s global posture is likely to draw renewed attention in 2026. Notably, the country hosted joint naval exercises with Russia, China, and Iran (just wtithdrew) under the BRICS Plus framework early in the year, which has heightened tensions with the United States and sparked domestic political debate about its geopolitical orientation. Such events could influence foreign investment, diplomatic ties, and trade policy. Watch the role the Trump appointed ambassador to SA, Leo Bozell 111, plays and his proclamations regarding our 143 Race Laws and the behaviour of a number of ANC Ministers.
- Credit Rating and Investment Confidence
A recent sovereign credit rating upgrade (S&P) marks a positive shift in investor confidence. This could lower borrowing costs and support capital inflows, though persistent challenges like crime, corruption, and public debt will remain under scrutiny.
- Service Delivery and Governance Pressure
Ongoing failures in municipal services, especially water systems and waste management, will drive political and civic action throughout the year. Many municipalities are in financial distress, and improving basic infrastructure is pivotal for economic revival and quality of life. Only possible if every effort is made to create inclusive institutions to ‘fix’. Interestingly Afriforum has 170 branches in various municipalities doing just this, working to improve service delivery and safety for all)
- Social and Labour Dynamics
High unemployment and inequality are likely to keep job creation and education reform at the centre of public debate. Summits and policy initiatives aimed at boosting skills development and employment opportunities will shape socio-economic discourse in 2026. Hopefully the BBEEE and Equity percentages debate, all designed to enable extraction, will be increasingly side-lined as entrepreneurship and education reform are seen as pivotal necessities for economic growth.
- Digital and Connectivity Expansion
Broadband and digital inclusion efforts, including national broadband initiatives and expanded fibre access, will be important growth drivers, helping bridge inequalities and support modern services and remote work. Improving internet infrastructure is part of long-term development strategies.
In conclusion, 2026 in South Africa will be shaped by pivotal elections, modest economic recovery supported by reform and investment, infrastructure upgrades, geopolitical balancing, increasing public/private ‘delivery’ partnerships and social and governance challenges. These developments together will determine whether the country can strengthen growth, stability and inclusive progress.
Critical to this will be the possibility of inclusive institutional change so that that the madness of EWC, NHI, BELA, BBEEE, Equity %’s etc and the attempts by the ANC to roll-back the inclusive framework intended by our 1996 constitution, with the sole intention of extracting, will be stopped.
By Steuart Pennington
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At the end of last year I researched the 10 most important ‘past’ developments in SA during 2025. It was largely positive focusing on our removal from Grey listing; a renewed commitment to infrastructure build; the strength of the Rand; the success of Operation Vulindlela; youth employment initiatives, lowering inflation, and the like. So what
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