Ladies and gentlemen,

Good morning. I’m appreciative of the opportunity to address you on an issue central to our country’s economic future: how we mobilise capital for investment and enhance the competitiveness of South Africa’s financial markets.

Economic growth challenge
South Africa has been experiencing severe economic growth challenges, manifested by high levels of unemployment, fiscal imbalances, among other weaknesses in macro-economic fundamentals. Our economy has not been growing due to a variety of constraints in the power supply, telecommunications, water, and freight logistics sectors. Other global economic and geo-political factors are also playing a role in generating a low growth environment.

To illustrate the magnitude of the growth challenge, the South African economy grew by only 0.6% in 2024, and growth averaged 2% between 2021 and 2024. This average growth rate lags our comparable peers. For example, the growth rates for Brazil, India and Turkey have been well above ours during the same period.

Recently global economic headwinds and increased uncertainty have triggered the revision of our growth projections from 1.9% in February 2025 to 1.4% by May 2025, while our comparable peers are registering higher growth rate projections.

The economic growth challenge in South Africa is dire and needs to be addressed as a matter of urgency.

Addressing economic growth challenges will positively impact labour absorption and thus employment, poverty and inequality. According to Statistics South Africa, South Africa's unemployment rate reached 32.9% in the first quarter of 2025. During the same period, Brazil, India and Turkey recorded unemployment rates of 7%, 5% and 8% respectively. This comparison highlights the gravity of our situation and the need for stronger collective commitment to economic growth.

As we tackle low growth, unemployment, poverty and inequality, we must unlock the power of our financial system to drive inclusive development and global competitiveness.

The financial sector: A pillar of the economy
South Africa’s financial services sector is not only robust—it is a cornerstone of our economic architecture.

It contributed approximately 22% of GDP in 2023—the largest sector in the economy.

It provides direct and indirect employment to nearly 3 million South Africans.

It contributes about 25% of corporate income tax revenues.

The Johannesburg Stock Exchange (JSE) is Africa’s largest and most liquid exchange, with over R20 trillion in market capitalisation.

We already have the foundation. But we must do more to unlock capital, deepen access, and position South Africa as a global financial hub.

Mobilising capital for growth and transformation

Unlocking domestic institutional capital
South African pension funds, insurers, and asset managers hold over R6 trillion in assets. We have revised Regulation 28 to enable infrastructure investment. The Infrastructure Fund, supported by R100 billion in public finance, aims to catalyse R500 billion in blended capital. Better PPP frameworks, faster approvals and risk-sharing instruments will support this.

Expanding access to finance for SMEs
SMEs contribute over 60% of employment but receive less than 10% of formal credit. We aim to:

Expand credit guarantees and co-investment mechanisms

Reform securitisation and commercial paper regulations

Build long-term local impact finance ecosystems

Financing infrastructure and the Just Energy Transition
Our Just Energy Transition Investment Plan (JET-IP) outlines a R1.8 trillion opportunity. We aim to become a leader in green hydrogen, battery storage and electric vehicles, supported by a pipeline of investable projects and a new green taxonomy.

Infrastructure investment has declined to under 13% of GDP—well below the 30% NDP target. We’re pursuing a bold, coordinated strategy to reverse this.

Enhancing private sector participation
New PPP regulations will take effect in June 2025. They reduce red tape, especially for sub-R2 billion projects. A programmatic approach is being applied in transport and water infrastructure, supporting municipalities with standardised frameworks.

Budget reforms to improve infrastructure investment
The capital budgeting system now features:

Four evaluation windows (instead of one)

A gateway for viability gap financing

Early-stage project evaluation to strengthen pipelines

A new performance-based conditional grant for metros will support governance and long-term financing in water, sanitation, energy and waste management.

Mobilising private and institutional capital
We’re engaging market players to channel long-term capital through:

Dedicated infrastructure funds

Project bonds and securitised debt

Retail vehicles like REITs

Municipal bonds and pooled instruments

Local currency guarantee facilities with the World Bank and AfDB

Embedding sustainability and resilience
We are embedding ESG principles in the Infrastructure Fund and developing green infrastructure standards. Infrastructure must be:

Climate-resilient

Gender-sensitive and pro-poor

Digitally integrated

Enhancing the competitiveness of capital markets

Deepening domestic capital markets
FSCA and National Treasury are working to:

Simplify listing requirements

Reduce capital-raising costs

Improve liquidity and retail investor access

Expanding access through innovation and inclusion
South Africa hosts over 500 fintechs. We’re finalising frameworks for digital assets and stablecoins and scaling digital banking to boost inclusion.

Positioning South Africa as Africa’s financial gateway
We aim to:

Promote South Africa as a structuring jurisdiction for African funds

Attract green bonds and sustainability-linked instruments

Align with AfCFTA’s vision for a single African financial market

The PIC will play a catalytic role, but it cannot act alone.

A compact for competitiveness and confidence
We need a new compact between all stakeholders—rooted in confidence, clarity and collaboration. We ask investors not to take unjustified risks, but developmental ones—shared with government.

We must also address our low savings rate—14% of GDP in 2024—compared to Turkey (24%) and India (31%). This compels us to attract foreign capital through a more competitive regulatory environment and affordable investment costs.

The cost of capital
Africa’s perceived risk results in higher borrowing costs. Bias in credit ratings costs the continent billions in lost opportunities. We must challenge this perception through macroeconomic stability and lower inflation.

The SARB has played a key role in stabilising inflation, and work continues on refining the inflation target framework.

Addressing the FATF greylisting
South Africa has addressed 20 of 22 FATF action items and is on track to exit greylisting by October 2025. We remain committed to transparency, compliance and building an internationally credible financial system.

Conclusion: From aspiration to action
If we are serious about growth, inclusion and transformation, we must:

Unlock low-yielding capital

Channel investment into future-defining infrastructure and enterprises

Become a developmental capital market with Africa as our base and the world as our opportunity

We have the institutions, capital and urgency. Now we need the will.

Let us build the financial system—and the economy—that South Africa deserves.

I thank you.