Economy Takes Centre Stage in State of the Nation Address

President Cyril Ramaphosa used his 2026 State of the Nation Address to present an optimistic picture of South Africa’s economic recovery, arguing that the country has moved beyond years of stagnation and is now positioned for sustained growth. He cautioned, however, that reforms must continue and that economic gains must be shared more widely if recovery is to be durable.

Ramaphosa said the economy is “growing again, and this growth is gathering pace,” pointing to four consecutive quarters of GDP expansion after more than a decade of weak performance. He highlighted improved fiscal stability, noting that government has achieved “two consecutive primary budget surpluses” and is now “on a clear path to stabilising our national debt.”

These gains, he argued, are restoring confidence. “Our credit rating has improved, interest rates are coming down and inflation is at its lowest level in twenty years,” the President said. He added that the rand has strengthened and the Johannesburg Stock Exchange has “performed exceptionally well over the past year,” signalling improving investor sentiment after years of economic uncertainty.

A central theme of the address was the role of structural reform in driving recovery. Ramaphosa credited Operation Vulindlela with “accelerating economic reform and opening the way for investment and competition,” particularly in sectors that had constrained growth. Chief among these is energy. Declaring the end of load shedding, he said government has “built a more dynamic and resilient energy system” and is now focused on long-term energy security, affordability and competitiveness.

Green energy featured prominently as both a growth and industrialisation opportunity. Ramaphosa said regulatory reforms and private investment are reshaping the energy mix, with renewables expanding rapidly. “By 2030, more than 40 percent of our energy supply will come from cheap, clean, renewable energy sources,” he said, arguing that lower electricity costs will reduce pressure on households and improve business competitiveness.

The President said South Africa is pivoting towards green growth, expanding support for the manufacturing of green products for global markets, “from fertiliser to jet fuel, chemicals to steel.” From March this year, government will introduce a 150 percent tax deduction for investment in new energy vehicles, alongside support for local battery production.

International pledges under the Just Energy Transition Investment Plan now stand at approximately R250 billion, funding large-scale investment in manufacturing, infrastructure and skills.

Infrastructure investment was positioned as the backbone of the growth strategy. Government has committed “more than R1 trillion in public investment over three years,” the largest infrastructure allocation in South Africa’s history. Ramaphosa emphasised that infrastructure is “much more than an investment in brick, mortar, concrete and steel,” describing it instead as “an investment in jobs, productivity and growth.” Major projects are underway in transport, water, energy and digital infrastructure, supported by new public-private partnership regulations and innovative funding tools such as infrastructure bonds.

Logistics reform featured prominently, reflecting its importance to exports and industrial growth. Ramaphosa said performance at ports and freight rail is improving, with volumes steadily increasing. He announced further private sector participation in port terminals and rail corridors, noting that a new partnership at Durban’s Pier 2 Container Terminal will bring the port back to “world class standards.”

Despite macroeconomic improvements, Ramaphosa acknowledged that economic hardship remains widespread. “For too many people, life remains hard. Jobs are scarce and opportunity is out of reach,” he said. While unemployment is “starting to decline,” job creation remains government’s most urgent challenge. Employment programmes have already created “over 2.5 million opportunities,” mainly for young people and women, and will be expanded and better coordinated to provide pathways into long-term work.

Sector-specific growth strategies are intended to drive further job creation. Agriculture, Ramaphosa said, is expanding rapidly, with South Africa now the “second largest exporter of citrus fruit in the world.” However, he warned that the sector faces serious short-term risks. The outbreak of foot-and-mouth disease, particularly in KwaZulu-Natal, has been declared a national disaster, effectively placing agriculture under a state of emergency. Government has committed to vaccinating the national herd and mobilising all necessary resources to contain the outbreak and protect the agricultural economy.

Manufacturing support will focus on protecting jobs in vulnerable industries such as steel and automotive production, while positioning the economy for future growth in electric vehicles, green manufacturing and critical minerals. Mining was described as a “sunrise industry,” with ore reserves valued at “more than R40 trillion,” supported by renewed investment in exploration and beneficiation.

The services sector continues to grow, particularly in digital technology, financial services and tourism. Ramaphosa said South Africa has attracted major investment in digital infrastructure, with 55 data centres already built and more than R50 billion in additional investment expected over the next three years. Tourism recorded 10.5 million visitors last year, with every 13 international arrivals supporting one job.

Small and medium enterprises were identified as critical to reducing unemployment. Ramaphosa noted that if every SME employed just one additional person, “we would create 3 million new jobs.” Government will provide more than R2.5 billion in funding, expand credit guarantees and reduce regulatory barriers, particularly for women- and youth-owned businesses.

Social protection remains a key pillar of economic stability. The Social Relief of Distress Grant, Ramaphosa said, has “kept millions of South Africans out of food poverty” and will be continued, though redesigned to better support livelihoods and productive activity.

Concluding his economic message, the President stressed that growth must be inclusive. “We can only be strong when we are equal,” he said, arguing that recovery must translate into improved living standards. As growth accelerates, he added, “this rising tide must lift every South African.”

Economy Takes Centre Stage in State of the Nation Address