The renewed friction between Israel and Iran has once more underscored geopolitical risks on the global stage. During these events, the resilience of the South African economy has been noteworthy, with the rand exhibiting a marked improvement compared to previous global crises.
A significant portion of this strength can be traced back to a strategic enhancement of policy credibility. This includes a lower inflation target, a burgeoning primary budget surplus since 2023/24 following 15 years of deficits, and a fiscal strategy projecting that government debt will peak at 78.9% of GDP this year before tapering to around 75% by 2030.
At the recent African Economic Conference in Abidjan, Konstantin Makrelov, the newly appointed head of economic research at the Reserve Bank, highlighted the improved fiscal metrics of the country as a pivotal factor in its resilience.
He noted that South Africa is now in a much stronger position to withstand economic shocks due to sound fiscal and monetary policies, unlike scenarios marked by rising debt-to-GDP ratios or elevated inflation. He referred to the market’s harsh response to the 2015 sacking of finance minister Nhlanhla Nene as an instance of how challenging it can be to regain lost credibility.
Fiscal discipline has also resulted in credit rating upgrades: in November 2025, S&P upgraded South Africa’s long-term foreign currency credit rating for the first time in two decades by one notch.
Similarly, Moody’s adjusted its outlook from stable to positive in late May 2026, and on June 5, Fitch also upgraded South Africa’s long-term credit rating, representing its first upgrade in 21 years.
Improvements within the financial sector, especially those addressing FATF requirements, have further strengthened this resilience.
The Corporation for Deposit Insurance has activated deposit insurance, and the nation has upgraded its emergency liquidity and resolution frameworks.
These reforms have bolstered an already sophisticated and esteemed financial services sector, featuring strong companies and institutions, including the Reserve Bank, National Treasury, and Prudential Authority.
Fundzi Tshazibana, CEO of the Prudential Authority, remarked that this strength served as a buffer during the Iran conflict, rendering South Africa more resilient to external shocks than it was during the Covid-19 pandemic or the market upheaval following Russia’s invasion of Ukraine.
This resilience is now being applied to fuel security.
Minister of Mineral and Petroleum Resources Gwede Mantashe has presented a draft Strategic Petroleum Stocks Policy aimed at concluding South Africa’s voluntary fuel stockholding approach.
The draft mandates the state to maintain 60 days of strategic crude and refined reserves, while private wholesalers will manage an additional 21 days at their expense—the first increase in strategic reserves since the 1970s.
Minister Mantashe’s proposed intervention is a significant step forward.
It also aims to amend a historical error: the 2015/16 sale of 10 million barrels from the nation’s strategic oil reserves at discounted prices, which was later deemed unlawful by the Western Cape High Court. No criminal charges have been pursued in this matter.
In another encouraging development for South Africa, Toyota launched the ninth-generation Hilux at its Prospecton plant in Durban last week, supported by a R10.4 billion investment for retooling—the largest single-product investment in the company’s South African operations.
This indicates confidence as other markets compete for such investments.
President Cyril Ramaphosa’s comments during the launch were particularly inspiring.
He stated that South Africa’s critical minerals, coupled with advanced manufacturing and local beneficiation, position the nation as a potential “leading global hub for future mobility.”
President Ramaphosa further emphasized: “To fully seize that opportunity, we must continue to enhance the efficiency of our logistics system.
“Reliable ports. Efficient railways. Modern infrastructure.
“These… determine our global competitiveness.”
While he may be seen as overly optimistic, he rightly underscores that unlocking these opportunities hinges on the vigorous pursuit of essential reforms.
In this context, we will soon disclose the results of the BLSA Reform Tracker for April-June. While there is some good news, there are areas of concern that persist.
One of the major challenges confronting South Africa’s ambitious reform program, particularly in critical sectors such as energy, transport, water, and local government, is its complexity. These reforms often require multiple layers of coordination, necessitating time for effective implementation, which means results will likely manifest over the long term.
In times of difficulties, I remind myself that these endeavors are more for our children and grandchildren than for our own generation.
Thus, it is encouraging to witness that we are beginning to reap some of the rewards from this challenging journey.
The more elements of this extensive reform program that are successfully executed, the closer we will come to establishing an efficient backbone for the economy, enabling businesses to operate effectively and foster quicker economic growth.
Ultimately, that is the most effective strategy to create jobs and significantly impact the unemployment rate.
While we cannot control global happenings and anticipate that more external shocks are likely, we can manage our preparedness for the next crisis.
We are making notable progress in fiscal matters and are moving in a promising direction with reforms.
The more we unite as a nation, the more efficiently we can tackle challenges and lay the groundwork for future generations to thrive.
*This column was first published in the Business Leadership South Africa (BLSA) weekly newsletter. The author, Busisiwe “Busi” Mavuso, is the CEO of BLSA.
*The views Busi Mavuso expresses in this column are not necessarily those of The Bulrushes
