Ramaphosa’s 2026 New Year Outlook: Credit Rating Upgrade, Infrastructure Boost and a Path to Economic Recovery

South Africa Signals Recovery as Ramaphosa vows 2026 Push

In a January 2026 address, President Cyril Ramaphosa sent a message of cautious optimism to South Africans, insisting the country and its economy are moving in a healthier direction after a challenging year. He acknowledged widespread hardship but argued that foundations for revival are strengthening across the economy and public life.

The president cautioned that unemployment, inequality, and poverty remain urgent concerns. He also flagged the persistent squeeze of living costs, rising crime, gender-based violence, and service-delivery problems in some communities. These issues, he said, shaped household budgets and business conditions throughout 2025 and continue to spark public frustration.

Ramaphosa stressed that the government recognizes the pain felt by ordinary citizens and that efforts to address these problems are ongoing. He called for broad collaboration among government, business, labor, civil society, and everyday south Africans to translate reforms into tangible improvements.

Economic Momentum

On the economy, Ramaphosa highlighted late-2025 and early-2026 positives. He noted easing inflation, which helps households, and a stronger rand, underpinned by returning investor confidence and favorable global conditions. A cornerstone of his message was South Africa’s credit rating upgrade—the first in nearly two decades—which he said will ease the way for borrowing to fund essential projects.

The president said the upgrade should enable cheaper, more accessible funding for infrastructure, social progress, and reform initiatives, without placing undue strain on public finances. Analysts described the upgrade as a signal that international investors are gradually regaining trust in the country’s economic management.

Ramaphosa pointed to progress in the country’s structural conversion program launched years ago. He highlighted Eskom’s recent profits, reporting more than R20 billion, and noted a sustained period without load shedding, a relief for many businesses and households already fatigued by power instability.

Improvements in rail and port operations were also cited, with the gradual recovery helping goods move more efficiently. Stronger logistics networks are seen as a boon for exporters, manufacturers, and farmers, while helping reduce costs that influence prices and competitiveness.

Infrastructure and Youth Employment

Infrastructure remains a central policy focus, with the president revealing more than R1 trillion budgeted for projects over the next three years.He said investment in roads, ports, rail, energy facilities, and water systems is already reviving critical channels of commerce and supporting job creation in construction and related sectors.

Ramaphosa highlighted private-sector participation in addressing youth unemployment. Through the Youth Employment Service, partnerships with business have already created over 200,000 work-experience opportunities for unemployed young South Africans, with expectations for continued growth in 2026 as more firms come on board.

Security,governance,and Dialog

The president reaffirmed that fighting corruption remains a top priority. He noted progress by specialized task teams tackling illegal mining, kidnapping, attacks on economic infrastructure, and extortion at construction sites. He pledged to strengthen professionalism and accountability within law enforcement and to implement Madlanga Commission recommendations to reform policing and related bodies.

Ramaphosa also defended the national Dialogue, launched to unite diverse voices across society. He said the process will continue through 2026 under a steering committee of community representatives guiding nationwide consultations.

Outlook for 2026

As the country steps into 2026, the management expects the macro picture to stay favorable. The rand is anticipated to remain steady against the dollar, supported by the credit upgrade and a backdrop of global rate movements.After substantial cuts totaling around 150 basis points by the South African Reserve Bank, a further easing path could unfold if inflation remains controlled.

Key indicators cited by the president

Indicator	Status/Impact
Inflation	Lower than recent peaks; easing pressure on households
Rand	Showing strength with improved investor confidence
Credit rating	Upgrade achieved; first in almost two decades
Eskom	Profits exceed R20 billion; multiple months without load shedding
Infrastructure spend	Over R1 trillion allocated for the next three years
Youth Employment Service	200,000+ work-experience opportunities created
Security reforms	Madlanga Commission recommendations to be implemented

Evergreen Insights: Why This Matters in the Long Run

The message blends short-term relief signals with longer-term structural work. A credible credit upgrade can lower borrowing costs and unlock investment in critical infrastructure, amplifying growth beyond the immediate fiscal cycle. Persistent improvements in Eskom’s reliability and logistics networks can reduce production costs, raise competitiveness, and attract investment across sectors—from mining to manufacturing and agriculture.

Continued reforms in policing and governance aim to restore trust in public institutions, a prerequisite for sustained private-sector confidence. The ongoing National Dialogue offers a structured path for inclusive policymaking, possibly delivering reforms that reflect diverse community needs while keeping the state’s reform agenda on course.

As 2026 unfolds, the balance between bold investments and prudent debt management will test policy choices. The private sector, education programs, and infrastructure initiatives will need to stay aligned to generate durable employment gains and shared prosperity.

Two Questions for Readers

What indicators will you watch most closely to judge South Africa’s recovery in 2026?

How should government prioritize infrastructure projects to maximize employment and long-term growth?

Disclaimer: This article is intended for informational purposes and does not constitute financial or legal advice.

Share your thoughts below and join the conversation as South Africa enters a pivotal year.

Public‑Private Partnerships (PPPs): 30 % via newly created PPP Unit within the Department of Public Enterprises.

Ramaphosa’s 2026 New Year Outlook: Credit Rating Upgrade

Moody’s, S&P Global and fitch confirm higher outlook

• moody’s upgraded South Africa from B2 to Ba1 in January 2026, citing improved fiscal discipline and a clear infrastructure pipeline.
• S&P Global raised the sovereign rating one notch to BB‑/, highlighting a stabilized debt‑to‑GDP ratio (now 66 %, down from 70 % in 2024).
• Fitch placed the country on a stable watch after a positive revision to its credit outlook, emphasizing the government’s commitment to the national Growth Plan (NDP) 2030.

Economic impact of the upgrade

• Lower borrowing costs: Yield spreads on 10‑year government bonds narrowed by ≈30 bps since the upgrade.
• Increased foreign‑direct investment (FDI): FDI inflows rose 12 % YoY in Q4 2025, driven by confidence in policy consistency.
• Currency stability: The rand appreciated 0.8 % against the dollar following the rating announcements,supporting import‑price moderation.

Source: Moody’s Investors Service press release, 4 Jan 2026; S&P Global Ratings, 6 Jan 2026; South African Reserve Bank (SARB) market commentary, 10 Jan 2026.

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Infrastructure Boost: Priority Sectors & Flagship Projects

Sector	2026 Investment (R bn)	Key Projects	Expected Economic Gains
energy & Power	35	– Completion of Medupi Unit 5 – Kusile de‑coalisation plan – Solar PV corridor (5 GW) in Northern Cape	+2.3 % GDP growth, 150 k jobs
Transport & Logistics	28	– Gauteng rapid Rail Upgrade (150 km) – Port of Durban expansion (Phase II) – Maputo Corridor revitalisation	3 % reduction in logistics costs
Digital & ICT	12	– National fibre Backbone (4 000 km) – 5G rollout in major metros – e‑Government platform integration	Boosts SME productivity by 8 %
Water & Sanitation	9	– Limpopo River basin water‑security scheme – Urban wastewater treatment in Cape Town	Improves health outcomes, supports tourism

Funding mix

• Public‑sector allocation: 55 % of total infrastructure spend (government budget).
• Public‑Private Partnerships (PPPs): 30 % via newly created PPP Unit within the Department of Public Enterprises.
• International financing: 15 % from the World Bank, AfDB, and Green Climate Fund for renewable projects.

Source: South African Treasury Infrastructure Strategy Paper, 2025; World Bank Project Database, accessed 1 Jan 2026.

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Fiscal Policy & Monetary Stability: pillars of Recovery

1. Balanced Budget Amendment (2025) – enforced a 3 % primary surplus target over the next three years.
2. Debt‑to‑GDP ceiling – Capped at 70 % with a mid‑term trajectory toward 60 % by 2030.
3. Inflation targeting – SARB maintained the 3 %–6 % band, achieving 4.2 % CPI in Q4 2025.
4. Tax reform – Introduction of a progressive digital services tax (2 % on foreign platform revenues) generated R 4 bn in FY 2025/26.

Resulting macro‑economic indicators (2025‑26)

• GDP growth: 2.8 % YoY (2025) → 3.2 % (2026 Q1)
• Unemployment: 32.5 % → projected 30.8 % by Q4 2026
• Current‑account balance: Surplus of R 12 bn in Q4 2025,supported by higher export volumes from improved logistics.

Source: South African Reserve Bank Monetary Policy Review, Dec 2025; National Treasury Fiscal Outlook, 2025.

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Job Creation & Skills Development: translating infrastructure into Employment

• Direct jobs: Infrastructure rollout expected to create ≈250 k direct construction and engineering positions by 2027.
• Indirect jobs: Multiplier effect of 2.3 yields ≈575 k indirect jobs in supply chains, services, and tourism.
• Skills initiatives:

1. National Apprenticeship Program – 40 % of project contracts now include apprenticeship clauses.
2. Digital Skills Hub – Partnered with Microsoft and CSIR to train 150 000 youths in AI, cloud computing, and cybersecurity.

Case study: Gauteng Rapid Rail Upgrade

• Budget: R 8 bn (PPP‑led).
• Employment impact: 32 k construction jobs, 5 k permanent rail operations roles post‑completion.
• Community benefit: Reduced commuter travel time by 22 %, enabling higher labor market participation.

Source: Department of Transport Quarterly Report, Oct 2025; CSIR Skills Development Review, 2025.

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Private‑Sector & PPP Opportunities: Unlocking Capital

• PPP Unit launch (2024) – Streamlined project pipelines, introduced obvious tender scoring and risk‑sharing frameworks.
• Top PPP bids (as of Jan 2026):

1. Renewable Energy Park – 1.5 GW solar farm (concessional loan of R 3 bn from Green Climate Fund).
2. Port of durban Automation – $ 1.2 bn private consortium for AI‑driven cargo handling.
3. National Fibre Backbone – R 5 bn equity from local telecoms, leveraging tax incentives for rural connectivity.

• Incentives:
• corporate tax allowance of 15 % on capital invested in infrastructure projects.
• Accelerated depreciation for renewable assets (up to 5 years).

Source: Department of Public Enterprises PPP Guidelines, 2024; Investment Climate Report, business Day, Dec 2025.

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Risks & Mitigation Strategies

Risk	Likelihood	Impact	Mitigation
Global commodity price volatility	Medium	could affect export earnings	Diversify export basket; strengthen value‑added processing
Energy supply disruptions	Low–Medium	threatens industrial output	Accelerate renewable roll‑out; implement demand‑side management
Political uncertainty	Low	May affect investor confidence	Institutionalise PPP Unit; uphold fiscal rules beyond election cycles
Climate‑related shocks	Medium	Infrastructure damage	Incorporate climate‑resilient design; access climate‑finance mechanisms

Source: IMF Country Report, South Africa, 2025; Climate Risk Assessment, SARAO, 2025.

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