Investec CEO backs South Africa’s economic growth to triple

Investec CEO Fani Titi expects South Africa’s economic growth rate to almost triple by 2030 as bottlenecks in electricity, logistics and other infrastructure ease.

Growth is expected to lift toward 3% by 2030 as structural constraints are gradually reduced, he said in the company’s annual integrated report published Tuesday.

The outlook is more bullish than the International Monetary Fund’s 1.8% forecast.

Africa’s largest economy expanded 1.1% last year and has averaged less than 1% growth annually for more than a decade. 

Titi sees Operation Vulindlela, set up by President Cyril Ramaphosa in 2020 to fast-track reforms, as a major catalyst for faster growth. 

The unit, which initially focused on energy and logistics, has since expanded to target other barriers to growth, including water infrastructure, municipal performance, spatial inequality, digital transformation and visa reforms.

“Improvements across these areas should support the uplift in growth,” Titi said.

The reform drive has improved investor sentiment and contributed to sovereign-rating upgrades from Fitch Ratings and S&P Global Ratings for the first time in decades.

The country has also exited the Financial Action Task Force’s dirty-money list, while posting a third consecutive primary budget surplus, where revenue exceeds non-interest expenditure.

Lower interest rates could also boost the economy, Titi said. 

Annual inflation is expected to return to the central bank’s 3% target by April, aided by favourable base effects, he said.

That’s after it surged to 4.5% last month because of a spike in energy costs linked to the Iran war. “This should allow the interest rate cutting cycle to resume, supporting investor sentiment, economic activity and the lending environment,” Titi said.