South Africa’s economy is expected to grow by only 1% in 2026, according to new figures from the International Monetary Fund (IMF). This is far below the 4.5% growth the IMF expects for Sub-Saharan Africa as a whole.
The numbers appear in the IMF’s Regional Economic Outlook Update for Sub-Saharan Africa, released in October 2026. Newsday worked out that South Africa’s projected growth is 78% lower than the regional figure.
“Risks remain decidedly tilted to the downside. Policies should sustain needed fiscal adjustment,” the IMF said in the report.
The IMF said Sub-Saharan Africa should grow by 4.5% in both 2026 and 2027. It said global supply changes, good export earnings in some countries and earlier reforms helped soften the blow from the war in the Middle East.
The fund added that steady growth across the region hides very different results in each country, such as South Africa. It said growth is slowing in countries that do not rely on natural resources. Countries rich in resources have kept growing.
“Pre-war fiscal adjustment and declining debt ratios are important achievements for many countries,” the IMF said.
But the IMF warned that high interest costs, low reserves and falling aid leave many countries with little room to handle another shock. It said governments should save short-term gains from high commodity prices. They should also aim support at poor households and keep inflation under control.
The IMF said protecting productive investment and helping the private sector grow would make future shocks less costly. It said this would also raise living standards over time.
South Africa is rich in resources, yet it is lagging behind other resource-based economies, Newsday reported. The IMF expects the Democratic Republic of Congo to grow by 5.2% in 2026. Zambia is set to grow by 5.6% and Ghana by 5.7%.
Newsday said this points to problems at home, such as poor policies, rather than global pressures.
Eskom chairman and business leader Mteto Nyati said the country’s weak economy is not an accident of history. He said it is mostly the result of choices the government keeps making.
“We talk endlessly about creating an enabling environment for business and investment, both local and international. Yet the actions do not match the rhetoric,” Nyati said.
“Red tape, inconsistent policy, and slow decision-making continue to choke investment across almost every sector of the economy,” he said.
Nyati said investors and local business owners will not wait forever. “Capital is mobile. Talent is mobile. Opportunity is mobile,” he said.
He said South Africa cannot keep blaming outside factors while avoiding hard work at home. He listed simpler rules, faster approvals and clear policy as part of that work. He also said business should be treated as a real partner, not a problem.
“The solutions are known. Many countries have done the hard work of cutting bureaucracy and prioritising execution,” Nyati said. “We can too, but only if we are honest enough to confront where we are falling short and disciplined enough to change.”
Source: this article is based on reporting by newsday.co.za. Image: newsday.co.za. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.