Ramaphosa’s Economic Warning: Growth Means Nothing Without Major Investment Push

President Cyril Ramaphosa has issued a sobering message to the nation: despite encouraging signs of economic recoveryincluding falling unemployment, shrinking poverty, and four consecutive quarters of growththe progress is fragile. In his weekly newsletter, the president stressed that this momentum cannot be sustained without a massive influx of investment, a warning echoed by leading economists who point to a silent crisis in capital formation.

The president highlighted real achievements: inflation at a 20-year low, a sovereign credit rating upgrade, and South Africa’s recent removal from the FATF grey list. These, he said, signal improved fiscal credibility. However, he argued that these are merely the foundations. “Increased investment is essential to maintain the change in South Africa’s economic path,” Ramaphosa stated, calling for a unified national effort.

The “Underappreciated” Investment Crisis

Analysts are sounding the alarm even more starkly. Peter Attard Montalto of Krutham stated, “The scale of South Africa’s investment shortfall is underappreciated.” He presented a startling figure: in the third quarter of 2025, total real investment was 14.4% lower than in the same quarter of 2019. “That screams crisis, yet it is barely recognised,” he said, noting the decline spans both public and private sectors.

Ramaphosa outlined the government’s role: boosting public infrastructure spending to over R1 trillion over three years and deepening structural reforms in electricity, logistics, and water to lower business costs. He emphasized that public investment is a crucial catalyst for private investment.

Global Headwinds and the African Opportunity

With global growth expected to remain sluggish amid trade tensions, Ramaphosa said South Africa must compete more aggressively, particularly on the African continent. “Only if our own institutions are strong can we compete and remain responsive in a rapidly changing world,” he noted.

Montalto agreed with the continental focus, urging an acceleration of the African Continental Free Trade Area (AfCFTA) to open wider markets. However, he expressed less optimism about the execution, doubting South Africa’s current agility to form the necessary international coalitions and trade agreements, especially with key partners like the EU.

The president’s message is one of cautious optimism tempered by a hard reality. The green shoots of recovery are visible, but they require the nutrient of capital to grow into lasting stability and job creation. The warning is clear: without a decisive public-private push to reverse the investment drought, South Africa’s economic spring may prove to be brief.