Market Update: We break down the business implications, market impact, and expert insights related to Market Update: South Africa economic outlook | Deloitte Insights – Full Analysis.
Reform momentum continues, building confidence
While structural and economic reforms have been ticking along, one of the most important outcomes, as of late October 2025, was South Africa’s exit from the Financial Action Task Force (FATF) “gray list.”
After being gray-listed in February 2023 due to strategic deficiencies in countering money laundering and terrorist financing, as well as weaknesses in law enforcement, prosecution, and transparency, South Africa was placed under increased FATF monitoring and required to implement a 22-item action plan to address these shortcomings.16
The gray-list exit has been welcomed by both the government and the private players, with the expectation that increased compliance and focus on tackling crime and corruption will help reduce transaction costs, boost investor confidence, and unlock investment.17
Reform momentum is also evident in the energy and logistics sectors, addressing not only historical impediments to growth but also restoring confidence in South Africa’s economic trajectory.
Following efforts to increase generation capacity and reduce loadshedding, the energy sector has shifted toward restructuring the electricity market. This includes advanced work to establish the South African Wholesale Electricity Market (SAWEM)—a competitive wholesale market—while continuing the unbundling of state-owned utility company, Eskom.18
The National Transmission Company of South Africa (NTCSA)—already carved out of Eskom—has recently completed a gap analysis of the systems and processes required for its role as market operator, with work underway to determine infrastructure and capacity required for operations.19
At the same time, training and accreditation are underway for future SAWEM participants to ensure that the skills base needed for a functioning wholesale market exists. Rules for the wholesale electricity market (or “the Market Code”) have been developed and will be submitted once the NTCSA obtains its market operator license.20
As the market prepares for these changes, there is also a significant pipeline of private sector renewable energy projects expected to be facilitated by the new market structure.21 Progress has also been made on South Africa’s Independent Transmission Project, a public-private partnership initiative to expand transmission infrastructure by at least 14,000 kilometers over the next decade to accommodate additional generation capacity. Requests for proposals are expected to be due soon.22
The other key factor dampening growth is the ports and rail sector. Inefficiencies and capacity constraints have undermined export competitiveness and driven up logistics costs. Prioritized reforms to modernize freight logistics—opening the sector to greater private participation and restoring operational performance—have included the allocation of rail network slots to 11 private train-operating companies across 41 routes this year. This marks a historic shift toward open access, while the development of a revised network statement and access tariff framework is set to establish fair and commercially viable terms for all operators by early 2026.23
Private sector involvement is also gaining momentum in the ports sector, particularly in container terminals, with new investment and management expertise. Similarly, the public-private partnerships unit has completed a review of market interest and is preparing the first requests for proposals for strategic rail and port corridors. Results from these reforms are already showing promise: Freight-rail volumes have increased by 5.5% year on year to over 160 million tons, reversing a multiyear decline. Port performance has also improved, with shorter vessel anchorage times and higher throughput.24
With the establishment of the Transport Economic Regulator and the unbundling of the National Ports Authority from Transnet on track for 2026, the sector is poised for further transformation—one that promises a more transparent and competitive environment. These reforms are laying the groundwork for a modern, efficient logistics system that will support South Africa’s growth ambitions and enhance its position in global trade, with an estimated 200 billion rand in potential investment over the next five years.25