At first glance, the R137.7bn of new projects recorded by Nedbank’s Capital Expenditure Project Listing for the first half of 2026 seems a reasonable sum. Until you consider that it is an 81% fall from the R718.5bn announced in 2025. Worse, it is the lowest half-year figure since 2017. The precipitous scale of the drop points to a private sector that is unwilling to commit capital, despite improving fiscal conditions.
Yet the money being committed by reluctant private companies still dwarfs a mere R30bn in public sector commitments, from just two projects. Renewable energy remains the dominant theme, making up R45.3bn of the total. Coca-Cola’s R17.6bn expansion, including a new vaccine manufacturing plant in Cape Town, was the single largest project and one of few signs of confidence outside the energy sector.
Nedbank forecasts gross fixed capital formation growth of only 0.6% in 2026. Over the past five years, South Africa’s rate of fixed investment as a percentage of GDP averaged 14%-15% a year. The National Development Plan targets 30%. The typical range for emerging market peer economies sits between 25% and 40% of GDP. South Africa’s capital stock is barely keeping pace with depreciation, let alone expanding the country’s productive capacity.
This is the predictable result of a policy environment that talks investment while doing little to earn it.
President Cyril Ramaphosa told the 2026 South Africa Investors Conference that the country is embarking on the largest infrastructure investment cycle in its history. Infrastructure, he said, is the flywheel that propels growth. The rhetoric has been consistent since his first investment conference in 2018. But eight years on, the flywheel is turning slower than it has since 2017.
Dragging its feet
The gap between promise and delivery is structural. Consider three areas where the government has had years to fix the problem – and hasn’t.
First, electricity. Eskom’s transmission arm remains locked in a dispute over who controls it and how it is run. Eskom’s CEO Dan Marokane has warned that continued uncertainty risks triggering cross-default clauses in the utility’s loan agreements. Investors weighing a decade-long capital commitment need to know who owns the wires their factory will connect to. Right now, nobody can tell them with confidence.
Second, local government. The Treasury withheld the equitable share grant from 69 municipalities in July 2026 after years of financial mismanagement. The Municipal Financial Sustainability Index fell to an average of 33 out of 100 in 2025, down from 36 the year before. Irregular expenditure across the municipal sector has reached a whopping R145.2bn since 2021. Firms that build shopping centres, logistics parks or housing developments depend on municipalities that can issue permits, maintain roads and keep the water running. Most cannot.
Third, policy certainty itself. The government of national unity has produced more coalition management than reform. Major questions on property rights, mining rights and labour regulation remain open long enough that firms treat them as permanent risks rather than resolved issues.
This doesn’t mean the government has done nothing. Fiscal risks have eased. Eskom’s generation fleet performs better than it did two years ago. Nedbank itself notes that structural constraints have eased noticeably. But easing a constraint is not the same as removing it, and investors would respond to the full picture.
The renewable energy projects that dominate this year’s listing are instructive. They cluster where policy has been clearest and most stable: a functioning bid programme, transparent rules and a predictable buyer. Where government has done the basic work of removing uncertainty, private capital has followed. Where it has not, capital stays on the sidelines.
South Africa doesn’t need another investment conference or another flywheel metaphor. It needs Eskom’s ownership question settled, municipalities that deliver basic services, and policies that encourage and incentivise capital formation. Until those three things happen, expect more limp commitments. The private sector has made its judgment.
Chris Hattingh is Executive Director at the Centre For Risk Analysis (CRA). With a special focus on trade, investment, and economic matters, as well as foreign policy, Chris serves on the Executive Board of the Global Trade and Innovation Policy Alliance, sits on the advisory council of the Initiative for African Trade and Prosperity and is a member of the George Ayittey Society. He holds an MPhil (Business Ethics) from Stellenbosch University.