Green shoots emerge as government reports progress on growth and reforms

Magwenya said President Ramaphosa has emphasised that South Africa’s immediate priority is to grow the economy in order to create jobs, reduce poverty and improve living standards.

Government says efforts to unlock economic growth, stabilise key sectors and address long-standing structural challenges are beginning to show measurable progress, with early improvements in energy security, stronger macroeconomic indicators and South Africa’s first sovereign credit rating upgrade in two decades.

Briefing the media in Pretoria on Monday, Presidential Spokesperson Vincent Magwenya said the results of Phase 2 of Operation Vulindlela — the government’s reform initiative led by President Cyril Ramaphosa — are starting to filter through across several sectors. The latest update forms part of a snapshot of government’s performance for 2025, measured against commitments made in the State of the Nation Address (SoNA) in February.

Magwenya said President Ramaphosa has emphasised that South Africa’s immediate priority is to grow the economy in order to create jobs, reduce poverty and improve living standards. These objectives anchor the Medium-Term Development Plan (MTDP) for 2024–2029, adopted by the Government of National Unity (GNU), which sets out three central priorities: driving inclusive growth and job creation; reducing poverty and the cost of living; and building a capable, ethical and developmental state.

Early signs of economic recovery

According to Magwenya, several indicators suggest that “green shoots” of economic recovery are emerging:

• The rand has strengthened and is now trading below R17 to the US dollar, signalling improved investor confidence.

• South Africa’s Gross Domestic Product grew by 0.5% in the third quarter of 2025, marking a continued expansion and creating a foundation for stronger growth in 2026.

• Unemployment fell to 31.9% in the third quarter — a 1.3 percentage point improvement — driven largely by job gains in the construction sector, which added 130 000 out of the 248 000 new jobs reported.

Government plans to spend R1 trillion on infrastructure over the next three years, which is expected to sustain job creation and stimulate economic activity in transport, energy and water systems.

Energy stability remains central to South Africa’s recovery. Magwenya said gains in electricity supply performance must be consolidated to ensure long-term reliability and support industrial expansion. Improved energy availability has already reduced load shedding frequency and increased operational confidence for businesses.

Youth employment remains a focus area. The Youth Employment Service (YES) recently reached a milestone of 200 000 young people placed in first-job opportunities, offering work experience and pathways into long-term employment.

Historic credit rating upgrade

South Africa received its first credit rating upgrade in 20 years when Standard & Poor’s (S&P) upgraded the country’s foreign currency long-term sovereign rating from BB- to BB, and the local currency rating from BB to BB+. The upgrade reflects improved fiscal stability, better governance of state-owned enterprises and progress on structural reforms.

“This is a significant vote of confidence in South Africa’s reform trajectory,” Magwenya said.

The International Monetary Fund (IMF) also revised its economic outlook for the country upward, projecting growth of 1.3% in 2025 and 1.4% in 2026, citing reform momentum and stronger-than-expected recovery in key industries.

Tourism, revenue collection and economic resilience

Tourism is rebounding strongly, with foreign visitor numbers rising 18% year-on-year. South Africa’s top source markets remain the United States (331 378 visitors), the United Kingdom, Germany, the Netherlands and France.

The South African Revenue Service (SARS) collected R924.7 billion in net revenue by 30 September 2025 — R78.6 billion more than the previous year and R18 billion above estimates, indicating stronger economic activity and improved tax compliance.

Government acknowledges persistent challenges

Magwenya also acknowledged several ongoing challenges, particularly at local government level. President Ramaphosa and Cabinet have engaged with seven provincial executives to intervene in struggling municipalities and address governance weaknesses.

Corruption allegations within the criminal justice system are being examined by the Madlanga Commission, while the Justice, Crime Prevention and Security Cluster continues to prioritise crime reduction and public safety.

Rising living costs remain a major concern. The GNU is working on measures to help households manage food price volatility and make public transport more affordable. Magwenya noted that these pressures are not unique to South Africa, with several countries reporting similar challenges during global G20 engagements.

“This is not a full review of government, but a high-level glance at successes and areas of concern since 6 February 2025,” Magwenya said. He added that reforms introduced during the 6th Administration are beginning to show impact, and the GNU is committed to accelerating progress to ensure that emerging “green shoots” translate into sustained improvements for all South Africans.