BER report highlights the urgency SA needs to turn its fortunes around
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SOUTH Africa could grow its economy to 3% or more and create up to 2.4 million additional jobs by 2030, but only if it urgently accelerates key structural reforms, according to new modelling by the Bureau for Economic Research.
The research, conducted by the Stellenbosch University-based unit, outlines sharply diverging economic futures for the country, warning that without decisive action, growth could slip back to as low as 0.5% and deepen poverty and unemployment.
While sentiment has improved as reforms begin to take hold, the report finds that this has yet to translate into the fixed investment needed for a sustained recovery. Growth remains fragile and vulnerable to external shocks, including geopolitical instability such as the ongoing conflict in the Middle East.
“As a small, open economy, South Africa cannot control the external environment,” the report notes, warning that the country must instead focus on strengthening domestic resilience and addressing internal constraints.
The BER modelled three scenarios — dubbed the Hadeda, the Marabou Stork and the African Fish Eagle — to illustrate the consequences of policy choices and reform implementation.
In the baseline “Hadeda” scenario, the economy continues to “muddle through”, with growth capped below 2%. While the government of national unity remains intact, weak state capacity and slow implementation limit meaningful progress. The result is stability without significant improvement, leaving unemployment and fiscal pressures largely unchanged.
The more severe “Marabou Stork” scenario paints a picture of institutional decline and economic stagnation. A shift toward populist policies and stalled reforms could erode investor confidence, tighten financial conditions and push growth toward 0.5% over the medium term. In this trajectory, the country risks repeating the “lost decade” of 2009 to 2019, with rising poverty, declining per capita income and worsening political fragmentation.
By contrast, the “African Fish Eagle” scenario presents a high-growth path driven by effective implementation of existing reforms. Under this outlook, South Africa could achieve 3% growth, maintain a 3% budget deficit and 3% inflation within three years — a framework the BER describes as “3x3x3 in three”.
This scenario hinges on improved execution, particularly through initiatives such as Operation Vulindlela and stronger public-private partnerships, alongside visible enforcement of the rule of law to boost investor confidence.
“At a minimum, it would mean the creation of 2.4 million more jobs by 2030 than the economy produced in 2025,” the report states, noting that this would be about one million more jobs than under the baseline scenario.
Roy Havemann, who heads the BER’s Impumelelo Growth Lab, said the key constraint is domestic rather than external.
“The binding constraint is domestic: whether the country can build its capital stock, restore the rule of law, maintain credible institutions, and connect to the world economy through a cost-effective national logistics system that boosts exports,” Havemann said.
Despite a baseline forecast of just 1.7% long-term growth, the BER maintains that a 3% trajectory is achievable if reforms are accelerated and deepened.
The report identifies persistent structural challenges — including crime and corruption, energy and water insecurity, failing municipalities and logistics bottlenecks — as critical barriers to growth.
To address these, it proposes ten “catalytic interventions”, including overhauling the criminal justice system, strengthening the independence of the National Prosecuting Authority, supporting the South African Revenue Service’s efforts to combat illicit trade, and reforming public sector appointments to reduce political interference.
Additional recommendations include modernising administrative systems, improving procurement transparency, pursuing large-scale infrastructure projects, and restructuring state-owned enterprises to promote competition.
“The window to lock in the Fish Eagle scenario is open, but narrow,” Havemann said. “Implementation speed, not policy intent, will determine which scenario prevails.”