Discovery CEO Adrian Gore shares good news about South Africa

The partnership between business and government in South Africa has led to several green shoots emerging in key economic sectors. 

In particular, the work done in the electricity and logistics sectors has seen the performance of state-owned enterprises stabilise and begin to improve. 

Coupled with this is work done in tackling crime and corruption, as well as local government dysfunction in parts of the country, particularly major cities. 

Outside this partnership, the National Treasury has also done immense work to implement fiscal consolidation and to drive Operation Vulindlela to encourage economic growth. 

The Treasury’s policy of fiscal consolidation has widened South Africa’s primary surplus, making it likely that debt-to-GDP will peak in the current fiscal year. 

This is feedback from Discovery CEO Adrian Gore, who explained that for the first time in a while, South Africa is able to tell a positive story about itself using concrete data. 

In the past, there were pockets of good news and various government plans to tackle important issues. This time around, the data is showing these issues are being addressed, leading to positive economic outcomes. 

“I tell you this, from a South African perspective, we have seen some green shoots in the last few months. This is a function of the good work done by business and the government,” Gore said. 

“We have to nurture these green shoots. However, in this world, we have to think about self-interest now.”

South Africa, being a highly open yet small economy, is often buffeted by international events and geopolitical shocks. This can only be addressed by improving local economic fundamentals. 

“I am totally convinced about the rubric we have created about growth, jobs, and confidence. Whatever we do must be about creating economic growth that creates jobs and confidence,” Gore said. 

Confidence is particularly important for Gore, as it has the ability to create a self-fulfilling cycle and drive sustained economic growth. 

It is also one of the quickest ways to stimulate an economy without having to expend significant resources.

The wind at South Africa’s back

South Africa is entering 2026 in the best shape it has been in for some time, with its credit rating upgraded by S&P Global on the back of improving state finances. 

This has been coupled with faster-than-expected economic growth and growing private-sector fixed investment. 

Government reforms in key sectors have also gathered momentum, with the private sector playing a significantly larger role in the electricity and logistics sectors than ever before. 

Crucially, this has come at a time when favourable global conditions are boosting South Africa’s economic fortunes. 

The rand is on its best winning streak against the US dollar for over 20 years, and the value of precious metals exports is surging. This has largely been driven by elevated uncertainty.

Investec’s head of equities, Will Ridge, said this gives investors the impression that the wind is at South Africa’s back for the first time in over a decade. 

The country’s improving fundamentals mean that SA Inc shares are no longer a contrarian bet, but rather, they are companies benefiting from a confluence of positive structural changes. 

SA Inc shares are those of companies that generate most of their earnings in South Africa, making them heavily reliant on the local economy for growth.

Improving fundamentals are a key difference between the periods of optimism seen in South Africa’s financial markets in the past decade and the current moment. 

Over the past decade, these flashes of optimism have been driven by external factors or short-term cyclical boosts, not sustained trends. 

This time around, South Africa’s improving fundamentals appear structural, with reform progressing, a lower inflation target being adopted, and government debt set to peak as a share of GDP. 

Most importantly, all of these elements show up in concrete economic and fiscal data, providing hard evidence for investors to invest in the country. 

Ridge outlined these factors with a brief explanation of each and how they are expected to boost the South African economy in 2026 –

• Commodities and currency: The basket of commodities South Africa exports remains well bid due to the super-cycle themes outlined above. At the same time, structural pressure on oil prices, driven by US output and potential Venezuelan restoration, benefits the import bill.
• Fiscal improvement: High commodity prices and a rally in bond yields have improved the fiscal position, further boosted by tax revenues from new sources such as online betting.
• Monetary space: With the inflation target firmly anchored at 3%, we forecast further rate cuts in 2026, easing the burden on consumers and businesses.
• The “self-help” list: The narrative is shifting from despair to repair. We are seeing tangible progress, including an exit from the FATF grey list, improved prospects for sovereign rating upgrades, and GDP growth printing above 2% for the first time in years. 

This does not mean there are no risks to the South African economy in 2026, with several local and international factors potentially derailing progress. 

In particular, uncertainty around the ANC’s next leader is expected to ramp up throughout the year, potentially impacting investor appetite for South African assets. 

There is also the potential for elevated volatility around municipal elections. However, this is expected to result in a positive change in the form of improved service delivery.