By: Miningmx

South Africa’s economy is gaining momentum as the country addresses long-standing structural bottlenecks, said Bloomberg News citing Standard Bank Group.

The bank’s chief economist Goolam Ballim said improvements in governance and infrastructure performance have finally lifted Africa’s largest economy, which grew by less than 1% on average over the past decade amid mismanagement and corruption.

Standard Bank forecasts growth of 1.7% next year, more optimistic than the International Monetary Fund’s 1.3% projection for 2027, rising to 2% by 2028. Ballim said the economy would continue building incrementally toward what he called “escape velocity”, with institutional capacity the key ingredient in reaching growth above 2%.

President Cyril Ramaphosa established a judicial commission last year to investigate criminal syndicates that had infiltrated the justice system, following serious allegations from KwaZulu-Natal’s police chief. The claims revived concerns about corruption that flourished under former President Jacob Zuma.

The commission’s final report, initially due at the end of August, has been extended to November 16, delaying its politically sensitive findings until after municipal elections on November 4. Ballim said the process, though damaging in places, could ultimately prove cathartic and boost investor confidence, noting that capital tends to follow confidence rooted in predictable rule of law.

He said the economy was already benefiting from better electricity supply and improved port and rail efficiency, adding that nearly 70% of reforms Ramaphosa identified in 2020 were on track or complete.

Stronger South African growth would also benefit the wider region, Ballim said, estimating that a one percentage point rise in the country’s GDP could lift southern African output by up to 0.7%.