The Presidency’s Project Management Office head Rudi Dicks said on Monday that South Africa’s reform agenda is progressing, supporting the prospect of higher growth from 2026 onwards.

Speaking during the release of Nedbank Capital Expenditure Project Listing 2025 report, he explained that significant progress was recorded in the electricity sector, with regulatory approvals and institutional developments that are advancing the transition to a competitive electricity market.

He noted that State-owned rail enterprise Transnet had maintained improved operational performance, which was reflected in higher rail volumes and continued progress with fleet renewal.

A major milestone was reached with the signing of the long-term concession agreement for Durban Container Terminal Pier 2, unlocking investment in port capacity and technology, he noted.

“Sustained progress in implementing reform commitments has resulted in higher policy credibility and growing confidence in South Africa's growth trajectory. Across all reform areas, the emphasis in the next quarter will be on completing outstanding regulatory processes, operationalising new institutions, and accelerating project implementation to ensure reforms translate into tangible economic and service delivery outcomes,” he added.

The Nedbank Capital Expenditure Project Listing 2025 report points out that the country’s outlook for fixed investment is cautiously optimistic, with expected improvements in gross fixed capital formation (GFCF) and private sector participation.

It notes that continued focus on energy security and infrastructure development will be crucial for sustaining investment momentum in the coming years.

The bank explains that GFCF is expected to improve from -2.3% in 2025 to 2.0% in 2026, with a projection of a sub-par 1.9% over the next three years.

Nedbank highlights that the recovery in GFCF is driven by stronger domestic demand, lower risk premiums, and falling borrowing costs.

The public sector also appeared better placed to execute its ambitious infrastructure plans.

“Despite pockets of improvement, the underlying conditions for broad-based investment growth remain weak,” added Dicks.

The bank’s Capital Expenditure Project Listing for last year indicates a significant increase in fixed investment plans, driven primarily by the private sector.

The electricity, gas, and water sectors led investments at R415.6-billion, reflecting ongoing efforts to address the country’s hindering energy crisis, highlighted Dicks.

Dicks said Eskom's R320-billion infrastructure overhaul was a major contributor, representing 77% of the sector's projects and 45.3% of total announcements.

Investments in renewable energy were a key focus, with projects aimed at diversifying the energy mix and enhancing energy security, he added.

The bank explains that fixed investment plans rose by 16.4% year-on-year last year, highlighting the total value of new projects, which increased from R606.3-billion in 2024 to R705.6-billion in 2025.

Dicks explained that private sector project announcements surged from R116.2-billion in 2024 to R382.5-billion in 2025.

Public corporations accounted for 45% of the total planned project value, while general government project announcements declined.

Investments are heavily concentrated in the energy sector, highlighting its importance for capital formation.

The recovery in private sector announcements is supported by improved macroeconomic conditions, including lower inflation and a stronger rand.

A decline in new public sector announcements follows a surge in 2024, with many projects still in early implementation stages.

The bank notes that the improvement in investment fundamentals is evident, with declining credit default swap spreads and lower long-term interest rates.

However, high operating costs and excess capacity in certain sectors pose risks to private sector investment.

The lack of visible progress on large-scale public infrastructure projects is a constraint on broader investment growth.

LOCAL GOVERNEMNT

Meanwhile, Dicks pointed out that the municipalities that participated in the first cohort of the Metro Trading Services reform (12 metro trading services in seven metros) will access incentive allocations through the adjustment budget.

He explained that these metros were progressing in the implementation of eight minimum accountability commitments to enable ringfenced trading services and strengthened management accountability and financial transparency.

A total of 266 submissions were received from a wide range of stakeholders in response to the White Paper Discussion Document that will inform the review of the local government system currently underway.

He announced that work on the review of the fiscal framework was ongoing, explaining that the review would assess the adequacy, sustainability, and equity of intergovernmental fiscal arrangements for local government.

Dicks also mentioned that work was underway to finalise the Municipal Finance Management Act Amendment Bill, which aimed to improve municipal financial management, accountability and oversight.

He said once approved the Bill would be published for public comment and country-wide consultation.