CEO Newsletter | Against the odds: why South Africa may be more ready for this moment than we think

By Samantha Pokroy

One of the big themes that emerged late last year was a tangible shift in sentiment around South Africa. For the first time in decades, bank CEOs were saying firmly positive things, which were supported by plentiful data. After a complicated year with global power dynamics shifting in unsettling ways, South Africa quietly put in a remarkable run.

The country exited the FATF greylist, received a ratings upgrade (the first in 20 years), the Government of National Unity held through early stress tests, anxieties over government debt eased, inflation has been tamed, loadshedding has receded from daily life, and the Rand delivered its strongest performance since 2009.

In addition, the JSE delivered standout returns. Equities rose by more than 35% (55–60% in USD terms). Bonds and listed property also posted strong double-digit gains, with currency strength providing an additional uplift for international investors.

These are powerful signals for investors. The question I keep asking, however, is: Is this improvement being felt on the ground?

The answer is: not yet.

Lead indicators versus lived reality

While sentiment about South Africa has shifted, on-the-ground indicators don’t yet tell the same story. The Absa PMI fell to 40.5 in December, deep in contraction territory. Employment remains under pressure, and we are not yet seeing a meaningful pickup in orders, capital expenditure or the kind of forward-looking investment behaviour that signals real economic momentum.

The IMF’s recent upgrade of South Africa’s 2026 growth forecast, from 1.1% to 1.4%, is welcome, but nowhere near enough to reverse the long-term erosion of GDP per capita.

Part of the JSE outperformance story is a broader rally across emerging markets (EM); however, SA outperformed the broader EM index by roughly 15 percentage points. Returns were also driven by commodity prices (JSE Resources Index up c.90% since April 2025) and the significant offshore exposure of large JSE companies.

Despite these dynamics, the broader SA market experienced a material rerating in 2025. Prior to 2018, SA equities traded on a similar P:E multiple to developed and emerging markets but suffered a severe derating thereafter on declining local and offshore investor sentiment. This appears to be changing and signals investor confidence in future economic activity.

Market commentator Izak Odendaal says the “trend of offshore acquisitions at the cost of domestic investment, which seems to have turned, was both a consequence of and contributor to a period of economic stagnation”.

This is supported by other leading indicators. The Reserve Bank’s leading business cycle indicator for November, released in January, rose 3.3% year-on-year. The index – which includes building plans passed, job advertisements and commodity prices – provides a signal of where the economy is likely to be six months ahead. We hope to see the economy’s fundamentals rise up to meet these expectations.

But, even where there is growth, we must consider that in the context of automation, AI and changing business models; labour absorption will not look like it did in previous cycles.

Discovery CEO Adrian Gore said in Davos we must be intentional about this: “Whatever we do must be about economic growth that creates jobs, that creates confidence, and you get a virtuous cycle.”

We should lean in to this positive moment with force and intentionality for a widespread socioeconomic impact. The market believes, so should we.

Complexity as a competitive advantage

All of this is happening in the context of a so-called unravelling of the rules-based order. There is a growing acknowledgement – voiced recently by Canadian PM Mark Carney and European Commission President Ursula von der Leyen – that the old world order is crumbling. Or, as Carney says, rupturing.

For many in the Global North, this is a shock. For South Africans, it is another variable in an already complex equation. The global system was never particularly fair or equal, especially if you happened to operate in the Global South. South African businesses have spent decades navigating uncertainty, policy shifts, infrastructure constraints and geopolitical complexity – and still found ways to compete and, in many cases, excel. What the world is now experiencing as disruption has long been our baseline.

Complexity can be an enemy of business – if you depend on stability, clarity and consistency. It can also be a source of advantage if you understand it, name it, and build organisations that can adapt.

This is why Mark Carney’s call to “name the reality” resonates so strongly with me. The old world of rules-based order and equality – if it ever existed – is gone. The pace of change is no longer year-to-year; it is week-to-week, sometimes day-to-day.

South African business leaders know this terrain intimately. That ability to remain agile without abandoning principles is suddenly in global demand.

Quiet resolve over grandstanding

I saw this play out at the G20 and B20 meetings last year. In a world marked by growing self-interest and protectionism, South Africa stood firmly behind its themes: Solidarity, Equality and Sustainability.

It wasn’t about refusing to budge on principle. It was about principles. It was about being clear on who we are, what we believe and what we are prepared to defend. Against the odds, the world came together and delivered a unified Leaders’ Declaration, a reminder that shared values still exist, even if power dynamics are shifting. It was inspiring to see South African business leadership role-modelling leadership for all.

In his closing address, B20 Sherpa Cas Coovadia reminded the world that Africa has moved from the margins of global dialogue to becoming a co-author of the global agenda. He offered the words of Ben Okri, a reminder of what this moment asks of all of us: “Our future is greater than our past. We are the miracles that must make the world anew.”

The B20/G20 moment may have passed from the headlines, but its relevance has not. As Europe and Canada openly grapple with a harsher, more transactional global order, South Africa has already demonstrated what principled adaptability looks like.

Why this moment matters

South Africa sits in a potentially powerful position in this global transition, as a key gateway to the African continent, the last frontier for growth, source of critical minerals and scarce resources, and home to a youthful population in an ageing world.

If we play this moment well and avoid those pesky “own goals”, the opportunity is significant, and private capital has an important role to play. In a world defined by volatility and structural change, patient capital, capital that understands complexity rather than fears it, becomes increasingly valuable. Private Equity is uniquely positioned to work with businesses through uncertainty.

Ready for the world as it is

The evidence is mounting that South Africa is better positioned than we have been in years. Following years of challenge and uncertainty, we may be better prepared for this fractured, fast-changing global reality than many of those scrambling to adapt. If we stay true to our principles and bring everyone along, this moment could mark something more durable than a market rally. The world has changed. For once, that may play to our strengths.