Economic Transformation in South Africa: Key Takeaways of SONA 2026
- Dylan Naidoo
- 5 hours ago
- 2 min read
By: Dylan Naidoo
The 13th of February marked the national State of the Nation Address (SONA) with South African President Cyril Ramaphosa, announcing budget allocations as well as commented on the state of the economy. A transcript of the full speech can be viewed here.
Economic Growth over the past year
President Cyril Ramaphosa declared the economy has seen improvement over the last year, citing all four economic quarters have shown moderate growth. However, he explains that he would like to see further improvement to meet social and economic challenges. This economic growth has produced exceptional results including a decrease in South Africa’s credit rating, decreased interest rates and inflation at an all-time low since the last 20 years. President Ramaphosa explained these factors could potentially help stabilise South Africa’s national debt, whilst also mentioning that the rand has strengthened against the dollar in the stock market, citing the Johannesburg Stock Exchange (JSE) performed well this past year,
Economic Reform
In the 2026 SONA speech, President Ramaphosa said that their newest project, Operation Vulindlela, made significant progress in accelerating economic reform, making South Africa an attractive prospect for investors. He detailed the following developments:
● The end of load-shedding and the building of an improved energy system.
● Improvement in the performance of freight rails and ports, increasing the volume of goods entering and leaving the country.
● The return of the passenger rail system, significantly reducing travelling costs for commuters.
● A greater investment in the country’s roads, bridges, rail lines, ports, dams, winds and solar farms.
Allocation of National Budget and other economic information
● R156 billion has been allocated to water and sanitation infrastructure for the next three years.
● R1 trillion has been allocated into public investment of infrastructure over the next three years.
● R7.8 billion has been provided to black producers of agriculture like citrus fruit, avocados, maize, livestock, grapes and wine.
● A 150% tax on new energy vehicles will be introduced in March this year, encouraging the local production of batteries.
● Pledges to the Just Energy Transition Investment Plan are at R250 billion, which is a large-scale investment in manufacturing, infrastructure and skills.
● R300 million will be allocated by the Industrial Development Corporation towards the Frontier Rare Earths Project in the Northern Cape.
● A target of R2 trillion has been set for investment of critical minerals and exportation of finished products for the next five years.
● R2.5 billion has been allocated in funding to over 180 000 small to medium-sized businesses, with a further R1 billion in guarantees.
● The skills development levy returned to employers has been increased to 40% in support of work-based learning.
● R500 million has been allocated to the restoration of District 6.
The step forward from here is more growth and more development of the country. President Ramaphosa explained that while growth is good, it can be improved. He hopes that these budget allocations will create a resilient and equal society in South Africa.
