By Akani Nkuna
The Minister in the Presidency for Planning, Monitoring and Evaluation, Maropene Ramakgopa, has welcomed South Africa’s 0.8% GDP growth in the second quarter of 2025, describing it as the strongest quarterly performance since 2022 and a modest sign of economic recovery.
Briefing the media in Hatfield, Pretoria, on Friday, Ramakgopa outlined government’s performance against the Medium-Term Development Plan (MTDP), noting that improved coordination across government and the public and private sectors had strengthened development efforts — despite persistently high unemployment.
“Youth unemployment remains unacceptably high at 58.5%, signalling deep structural labour market challenges. Poverty and inequality remain entrenched, with the Gini coefficient at 0.63,” she said.
“South Africa is making progress, but much more must be done to ensure economic recovery translates into jobs, incomes and improved well-being for all.”
Ramakgopa expressed concern that current growth levels remain too low to meaningfully address the country’s economic and social challenges, which continue to constrain long-term development prospects.
She said structural reforms in key sectors — including energy, logistics and tourism — were beginning to show positive momentum, although investment levels remain stagnant. Government, she added, has resolved to increase infrastructure spending, describing it as essential for inclusive growth.
“A primary budget surplus has been achieved, and South Africa’s exit from the Financial Action Task Force (FATF) grey list has helped restore investor confidence. Business confidence remains subdued at 39 points, largely due to logistics constraints and energy costs, but there are signs of improvement,” Ramakgopa said.
To boost economic performance and investment, she said her department had recommended strengthening investment facilitation capacity within the Department of Trade, Industry and Competition (DTIC) and InvestSA, fast-tracking public-private partnerships, and expanding export incentives, with a focus on high-growth manufacturing and agro-processing.
Ramakgopa also raised concern about persistent delays in infrastructure delivery, despite significant funding commitments, including R1.03 trillion allocated over the medium-term expenditure framework.
She said the Infrastructure Fund had approved financing for 26 projects worth R11 billion, while the Budget Facility for Infrastructure had approved 10 major projects valued at over R37.1 billion, many of which have faced implementation challenges due to municipal capacity constraints, procurement inefficiencies and financial mismanagement.
“Municipal debt has risen to R96.6 billion as at March 2025, posing risks to infrastructure sustainability. Delays in green expansion also threaten future energy security,” she said.
Ramakgopa noted that R44.2 billion in new investments had been secured through sector master plans, pointing to the automotive industry, where BMW’s launch of the X3 plug-in hybrid electric vehicle is supported by a R4.2 billion investment.
She also highlighted the R40 billion battery minerals pipeline as a strategic growth area for South Africa’s industrial future.
“We need to better integrate our growth and inclusion strategy with existing DTIC master plans to eliminate duplication and strengthen accountability. We also need demand-side interventions and infrastructure support to advance South Africa’s transition to new-energy vehicles,” Ramakgopa said.
INSIDE METROS