Economic optimism blossoms as South Africa addresses structural challenges

"While this is below the 2% targeted by the National Development Plan, this is welcoming news for South Africans who are desperate for economic growth that will see an end to issues such as the country's Unemployment Crisis and the current Cost of Living Crisis," says Dr Ridwaan Asmal, manager: School of Accounting, Finance & Tax at Mancosa.

Major steps

Raeesa Kader, financial accounting and management at Mancosa

Raeesa Kader, a senior academic at the School of Accounting, Finance and Tax at Mancosa, points out that the energy crisis, once a daily disruption (through load shedding), has significantly eased, with Eskom managing the country's electricity grid effectively for the first time in close to a decade. "These efforts are a direct result of the Generation Recovery Plan, which has improved the reliability of the coal-fired fleet while slashing diesel costs by more than two-thirds compared to the previous year," says Kader.

Eskom has reconnected Unit 2 of the Koeberg Nuclear Power Station in the Western Cape to the national grid following its long-term operation (LTO) programme. This initiative extended the unit's lifespan by 20 years, including replacing steam generators, thorough inspections, and refuelling for safe and efficient performance. "Eskom also increased its maintenance activities during December 2024, taking advantage of reduced industrial demand. With maintenance efforts averaging 8,000 MW, the improved energy availability (surplus) positions South Africa for a stable, mostly load-shedding-free summer, benefiting businesses and households alike," says Kader. While a brief three-day period of Stage 3 load shedding occurred on 31 January 2025, it showcased Eskom's enhanced ability to swiftly resolve challenges. The utility's quick response resulted in a fully stabilised power system by 7 February 2025, highlighting the utility’s improved crisis management capabilities.

Kader and Dr Asmal add that the logistics sector is another critical challenge that has shown notable improvement. Ports have reduced wait times, and rail freight is flowing more efficiently than during the peak of the crisis. These gains have been supported by efforts from the National Logistics Crisis Committee, which continues to address systemic challenges in the sector. While risks remain, such as the looming threat of a water supply crisis, these strides highlight the progress made in restoring vital infrastructure.

Managing the cost-of-living crisis

Global consumers are battling a cost-of-living crisis, manifested in high food prices, high fuel (petrol and natural gas prices), and high interest rates.

Dr Asmal points out that the South African Reserve Bank's (SARB's) decision to cut interest rates by 25 basis points in November 2024 came as no surprise, with many economists predicting the more cautious approach from the Monetary Policy Committee. The Bureau for Economic Research (BER) has cautioned that the SARB will "likely continue to tread carefully going forward", with many of the factors causing uncertainty unlikely to disappear over the near term.

Given this backdrop and the lingering uncertainties, economists anticipate the easing cycle to carry another 75 basis points of cuts in 2025, taking the repo rate to 7.00% and the prime lending rate to 10.50%. Lower rates, combined with rising real incomes, have boosted consumer confidence and household spending, thus signalling a turning of the tide for the country.

"The recent interest rate cut to 11% at the end of January is poised to fuel strong economic growth across South Africa in 2025," says Dr Asmal, "inflation is expected to remain low in the short term, with medium-term projections near 4.5%. With interest rates being largely defined by our country's inflationary targets and global macro influences, reductions significantly impact the market. They enhance affordability and boost sentiment across various sectors and industries of the economy."

He adds that growth will trend higher over the next few years, reaching 2% by 2027. "One sector in particular that is seeing the fruits of the recent spate of interest rate cuts is the property sector, which is now benefiting from increased buyer activity and land development, contributing to job creation, small, medium and micro enterprise (SMME) growth, and community upliftment, further driving positive market sentiment," says Kader.

Skills will continue the growth narrative

The economic growth that South Africa will be experiencing over the next five years will create significant opportunities for South Africans to take their place on the international stage. In a world of global interconnectivity, where South African workers are traditionally in high demand, transferable skill sets will be an important factor employers will look for in the future.

As one of the country's largest tertiary education providers focusing on distance learning, Mancosa places a significant focus on skills development and upskilling. It offers a range of options to students who want to upskill themselves.

Mancosa offers several business-to-business (B2B) solutions that encourage mentorship and skills development training, which will be essential factors in an economy experiencing significant growth.

LinkedIn data shows that employers who prioritise skills development to fill open roles are 60% more likely to find a successful candidate than those who don't. This shift is already happening significantly, with 75% of human resource specialists saying that the battle to fill skill gaps significantly impacts their current talent acquisition and retention programmes.

SkillME: embracing popular learning tools

A seismic shift entrenched by Covid-19 was the rise of online learning platforms. Within the business context, this enables employees to focus on skills development, which can be directly applied in the workplace. This is important in a growth economy as the business landscape constantly changes.

Mancosa's range of online short learning programmes are delivered through a futuristic online learning platform called SkillME. The platform combines Mancosa's 27 years of developing human talent into an online future-fit experience to fast-track employability within the modern workplace.

Students have access to expert guidance

Because Mancosa is a distance learning, technology-driven, tertiary education provider, its graduates possess transferable skills highly sought after by organisations operating within a global economy. Additionally, graduates have access to the Honoris Career Centre, where they receive additional advice on how to grow their careers.

The Career Centre has been built to upskill, reskill and teach new skills to our students and graduates to ensure they can find a job and advance their career or create a lifelong career journey. The Career Centre will also focuses on:

• Developing employers for the future;
  
• Boosting our economy through embracing digitalisation; and
  
• Reducing the socio-economic gap through entrepreneurship.

Courses offered by tertiary education providers need to be crafted to respond to the dynamic world of work. Mancosa pays particular attention to this to prepare students for the current and future world of work and provide them with skills that will equip them for the evolving macro environment.