South Africa Economic Forecast Released by Deloitte

South Africa has seen positive developments in structural and economic reforms as of late October 2025. A key achievement was the country’s removal from the Financial Action Task Force (FATF) gray list, signaling progress in addressing financial crime concerns.

Financial Action Task Force (FATF) Gray List Exit

South Africa was placed on the FATF’s gray list in February 2023 due to strategic deficiencies in countering money laundering and terrorist financing, as well as weaknesses in law enforcement, prosecution, and transparency. This designation led to increased monitoring and a requirement to implement a 22-item action plan. The subsequent removal from the gray list has been welcomed by government and private entities, with expectations of reduced transaction costs, increased investor confidence, and greater investment.

Energy Sector Restructuring

Efforts to increase generation capacity and reduce loadshedding have prompted a restructuring of the electricity market. Work is underway to establish the South African Wholesale Electricity Market (SAWEM), a competitive wholesale market, alongside the unbundling of Eskom, the state-owned utility company.

The National Transmission Company of South Africa (NTCSA), already separated from Eskom, has completed a gap analysis of required systems and processes for its role as market operator. Preparations are ongoing to determine the necessary infrastructure and capacity for operations. Training and accreditation programs are also in progress to develop the skills base needed for a functioning wholesale market. The rules for the wholesale electricity market, known as the Market Code, will be submitted once the NTCSA obtains its market operator license.

The new market structure is expected to facilitate a significant pipeline of private sector renewable energy projects. Progress has been made on South Africa’s Independent Transmission Project, a public-private partnership aiming to expand transmission infrastructure by at least 14,000 kilometers over the next decade.

Logistics Sector Reforms

Inefficiencies and capacity constraints in the ports and rail sector have previously hampered export competitiveness and increased logistics costs. Reforms to modernize freight logistics, including increased private participation and improved operational performance, are underway.

This year, rail network slots have been allocated to 11 private train-operating companies across 41 routes, marking a shift toward open access. A revised network statement and access tariff framework is expected to establish fair and commercially viable terms for all operators by early 2026.

Private sector involvement is also growing in the ports sector, particularly in container terminals, with new investment and management expertise. The public-private partnerships unit has completed a review of market interest and is preparing requests for proposals for strategic rail and port corridors.

Early results from these reforms are encouraging, with freight-rail volumes increasing by 5.5% year on year to over 160 million tons, reversing a multiyear decline. Port performance has also improved, evidenced by shorter vessel anchorage times and higher throughput.

Future Transformation of the Logistics Sector

With the establishment of the Transport Economic Regulator and the planned unbundling of the National Ports Authority from Transnet by 2026, the sector is poised for further transformation. This aims to create a more transparent and competitive environment, laying the groundwork for a modern, efficient logistics system that will support South Africa’s growth ambitions and enhance its position in global trade. An estimated 200 billion rand in potential investment is anticipated over the next five years.