Africa’s largest economy could benefit from the global commodities surge, provided that the Government of National Unity (GNU) stays the current course of structural reform, Goldman Sachs has said in its latest market update.
Speaking ahead of President Cyril Ramaphosa’s State of the Nation Address on Thursday, February 12, the Wall Street investment banker said mergers, acquisitions and markets were expected to show strong momentum in 2026.
It’s not the first time this year that the GNU has been lauded for the current path of policy reform as a means to grow the economy.
Shifting from an extended period of poor confidence, Goldman Sachs said investor interest had been re-established in South Africa’s potential as an economic harbinger for the region.
This sentiment was also recently expressed by Future Forex CEO Harry Scherzer when he told Jeremy Maggs’ Moneyweb@Midday show that structural reform would be crucial for the year ahead.
Goldman Sachs said the most important areas where continued reform would be monitored by investors remained logistics, energy and fiscal management.
Coming on the back of a challenging environment in these key segments, a renewed sense of investor appetite has risen from longer term bear market prospects and related, positive risk assessment.
But it’s South Africa’s immediate future deal prospects that Goldman Sachs is most optimistic over, especially as demand for gold, platinum-group metals and other primary minerals continue drive profit across the sub-Saharan mining sector.
Future Africa reports that “data from the World Bank shows that commodity exporters often attract more capital during price upswings. In South Africa, this effect is boosting interest in consolidation and expansion deals. Mining strength is also lifting demand in logistics, power, and services”.
“Capital markets are becoming more relevant as funding conditions improve. The Johannesburg Stock Exchange is seeing renewed work on listings and share sales. Mid-sized firms are looking for growth capital.”
Signs supporting South Africa’s current economic strength, are the Reserve Bank’s policy decisions in support of inflation targeting and resulting business confidence, further strengthened by solid investment on the Johannesburg Stock Exchange.
As a result, the rand has stabilised, reducing risk, and attracting more capital market inflows.
