South African companies doing the government’s work
The decline in the government’s financial health has severely affected its ability to invest in critical service provision and essential infrastructure in South Africa.
This has left a significant gap in the provision of these services, with many private sector companies stepping in to fill it.
From Sanlam’s newly launched R4 billion Property Impact Fund to Discovery’s Pothole Patrol, pockets of the private sector are investing heavily in South Africa.
This can also be seen in the rising popularity of private schools, with Curro a shining example, and the widespread growth of private medical aids.
However, low business confidence in South Africa is preventing more companies from doing the same, with some private players preferring to keep their cash on the sidelines.
The Reserve Bank’s latest quarterly bulletin showed that South African companies are sitting on a R1.8 trillion cash pile, which they are waiting to deploy in the country when economic conditions improve.
The report explained that South Africa’s non-financial companies (NFC) now hold more money than they did before the pandemic.
The Reserve Bank explained that this excessive stockpiling is due to increased uncertainty during the Covid-19 pandemic, which has continued into 2025.
Stanlib chief economist Kevin Lings has also attributed the private sector’s hesitance to deploy its cash pile to a lack of confidence in the local economy.
He previously explained that the government has to create an enabling environment to foster confidence in the local economy if it wants to encourage businesses to invest in the country.
This is particularly true for fixed investment, which has declined significantly in South Africa over the past few decades, decreasing from around 30% of GDP in 1976 to 15% in 2024.
This decline has coincided with a weakness in the government’s fiscal health, with the state simply not having the balance sheet to invest enough in improving or maintaining South Africa’s infrastructure.
Over the past decade, government debt has soared to reach 78% of GDP, with debt service costing the government around R1.2 billion a day, limiting its ability to spend in more productive areas of the economy.
At the same time, many private sector players have been hesitant to invest in an economy that has averaged less than 0.8% GDP growth over the past decade.
However, over the past few years, some companies have stepped up to invest in services that would typically fall to the government to provide. Below is an overview of three of these initiatives.
Sanlam’s big infrastructure bet
One of the most recent initiatives to be launched, Sanlam Investments’ Property Impact Fund, is set to lead to significant infrastructure investment over the next few years.
This fund, launched on 30 October 2025, will invest in essential social infrastructure, including affordable housing, student accommodation, rural and township retail, education and healthcare.
Sanlam Investments pointed out that, despite South Africa’s unique infrastructure investment opportunities, less than 2.7% of the country’s R5.8 trillion pension fund savings are allocated to private markets.
In addition, infrastructure investment represents only a fraction of that, which is what its new fund is looking to address.
The Property Impact Fund is an equity investment vehicle that integrates sustainability and inclusion to meet South Africa’s critical infrastructure needs.
The fund focuses on delivering property facilities in the form of affordable housing, student accommodation, rural and township retail, education and healthcare.
The company described these sectors as vital to the country’s “missing middle”, including teachers, nurses, police officers and entry-level professionals who make up 23% to 30% of the population.
“South Africa’s stark inequality has left many lower-middle-income earners without access to quality social infrastructure,” it said.
“Government efforts tend to prioritise the very poor, while private finance often overlooks this group.”
Therefore, this fund aims to directly consider the needs of the lower- to middle-income working class, contributing to a more inclusive and sustainable economy.
Sanlam Investments portfolio manager Kamogelo Leeuw explained that the fund targets an investable opportunity set of over R2.9 trillion in impact-driven property assets.
Seeded with R1.4 billion by the Sanlam Group, the fund has a target size of R4 billion worth of assets under management, aiming for returns of CPI + 9% per annum.
It is structured as an open-ended fund with a minimum investment in the investment-linked policy vehicle of R50 million.
Curro’s new era
Curro is currently in the process of becoming a non-profit organisation, with its new owners believing this is the best move to achieve the group’s education and social impact goals.
Established in 1998, Curro has since become the largest private school group in South Africa.
The company has over 180 schools in operation across South Africa, as the demand for its affordable, high-quality education continues to grow.
Earlier in 2025, the Jannie Mouton Foundation offered to buy all of the company’s shares for around R7.2 billion.
The Jannie Mouton Foundation is a charitable organisation that was founded by well-known businessman Mouton as a public benefit organisation.
Referred to as a “game-changing” transaction for South African education, Curro’s takeover is likely the largest philanthropic contribution South Africa has ever seen.
“Education has always been close to Jannie’s heart; he sees it as a powerful way to uplift communities in South Africa and help South Africans reach their full potential,” the foundation said when the deal was first announced.
“That’s why the Trust is putting almost all of its resources into making this happen. By working with Curro, the Trust believes it can create far greater impact.”
“Building and improving schools takes time, and most investors aren’t willing to wait that long. But the Trust is in it for the long haul, focused on making a real, lasting difference.”
“Over time, this will open the door for thousands more children to attend Curro schools through bursaries, broadening access to excellent education,” foundation chair Jan Mouton said.
This move, and the booming sector of private education in South Africa, points to a strong demand for these services over their public counterparts.
Private schools continue to grow rapidly in South Africa, with the total number doubling in the past 15 years.
This has seen private schools play an increasingly important role in addressing the challenges of declining academic outcomes in South Africa, as public education steadily collapses across the country.
At the same time, this has opened up a significant opportunity for private education companies to benefit financially.
Camissa Asset Management investment analyst Edward Mtsweni recently pointed out that there has been a 10% decline in the number of public schools in South Africa since 2009, while private schools have nearly doubled.
Private schools now educate 741,000 students in South Africa, with an average class size of 16 pupils. The public sector educates 12.8 million students at a class size of 31 pupils.
This growing demand for private education has seen providers like Curro, STADIO, and ADvTECH boom over the past few years, with all three companies continuing to go from strength to strength.
Discovery’s pothole problem
In a highly unique move for an insurer, Discovery launched its Pothole Patrol initiative in 2021.
This initiative, which is in partnership with the City of Johannesburg and Avis, has repaired over 320,000 potholes in Johannesburg since launch.
Discovery CEO Adrian Gore previously estimated that potholes were costing South Africa around R650 million a year.
The company realised that potholes not only came at great expense to the government and ordinary South Africans, but also affected its insurance business through an increasing number of claims relating to damage caused by potholes.
Therefore, addressing the growing problem would have wide-reaching benefits, which is how the Pothole Patrol was formed.
“When we launched the pothole initiative back in 2021, it was to solve an obvious and widespread problem that affected not only our clients, but other insurers and broader society,” Gore said.
“Potholes were causing frustration, damage, and a sense that the economic hub of the country was in serious and irreparable decline.”
Gore recently revealed the immense progress this project has made, with over 320,000 potholes being filled at a rate of 75,000 per year.
These efforts have not only improved the lives of Joburg motorists but have also seen Discovery Insure’s pothole claim frequency reduce by 26% since 2021.
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