Nedbank CEO warns South Africa is missing out

Nedbank CEO Jason Quinn said South Africa is losing its attractiveness compared to other emerging market peers, as foreign investors need more proof points that indicate a sustainable economic recovery.

Speaking at the Nedgroup Investments Treasurers’ Conference on 19 August 2025, Quinn explained that foreign investors are not as interested in emerging markets as they once were.

He said the concept of emerging markets’ yields seeming super attractive relative to locals is not there at the moment, and foreign investors are not currently that interested in these markets.

In addition, if these investors are interested in emerging economies, they look more to Greece and Brazil.

“South Africa is on the sidelines, but they are really looking for quality stocks, so they won’t buy the whole index anymore,” Quinn said.

He said investors prefer to look at big banks and retailers as a proxy for South African opportunities. 

He pointed out that some foreign investors have a very strong conviction about the possibility in South Africa. However, they are looking for more “proof points” that South Africa will grow as strongly as the country claims.

The Government of National Unity (GNU) has set an overall target of 3% GDP growth over the medium term. 

However, hopes for this level of growth over the next few years have largely been dashed following significant headwinds, both local and global, so far in 2025, that are set to weigh on the country for some time.

This includes 30% United States tariffs on South African goods and persistent local structural constraints, such as Transnet’s slow recovery.

Now, expectations for South Africa’s economic growth have been revised downward, with most economists expecting GDP growth of 1% or less for 2025.

While growth expectations for 2026 look more positive, with the National Treasury forecasting growth of 1.6% for next year, this is still far below the level South Africa needs to address challenges like unemployment.

It is also not enough growth to attract significant foreign investment in South Africa.

South Africa scaring off investment

Quinn said one of the ways in which South Africa could attract foreign investment and provide them with “proof points” in the country’s favour is through large-scale infrastructure investment.

This was also one of the GNU’s biggest focus areas, with Infrastructure Minister Dean Machperson wanting to turn South Africa into a “construction zone”.

The GNU has also committed R1 trillion towards infrastructure spending over the next five years.

Nedbank chief economist Nicky Weimar said this investment would go a long way toward addressing some of the country’s structural constraints.

Also speaking at the Nedgroup Investments Treasurers’ Conference, Weimar said the government’s priorities are in the right place, as they plan to focus this spending on logistics, energy, and water.

However, she said there are significant risks to the government’s ability to use this R1 trillion in funding as effectively and efficiently as needed.

This is mainly because much of this funding will be allocated through South Africa’s public enterprises, which do not have the best track record for efficient and productive spending.

In addition, this plan is heavily reliant on the country’s provincial and municipal governments, which, in many areas, struggle with instability, financial challenges, and inefficient resource allocation.

Because of these challenges, large-scale infrastructure development in South Africa is largely expected to be driven by the private sector.

There is more than enough capital in the private sector to achieve this, with South African companies sitting on R1.5 trillion in cash that remains undeployed in the local economy.

However, this cash is currently being kept on the sidelines due to the lack of investment opportunities in South Africa’s stagnant economy and the elevated risk of investing locally.

Old Mutual chief economist Johann Els recently explained that South Africa is suffering from a 15-year-long confidence crisis, with business confidence only being in positive territory twice in that period. 

This concern is primarily caused by policy uncertainty, a lack of implementation, and the doubling down on policies that have not improved economic outcomes.