SOUTH AFRICA · ECONOMY
South Africa needs more investment to grow faster, but more money alone will not do it, according to new research from the insurer Old Mutual. Chief executive Jurie Strydom presented the findings at the company’s third annual Thought Leaders Forum in Johannesburg in October 2026, Business Day, a South African business newspaper, reported on 10 November.
The study, written with Professor Adrian Saville of the Gordon Institute of Business Science (GIBS), a Johannesburg business school, and his advisory firm Boundless World, says the country invested about 14% of gross domestic product (GDP) on average in the five years to 2025. The average economy invested roughly 22%.
Key Facts
- Gap South Africa invested about 14% of GDP in the five years to 2025, against roughly 22% for the average economy.
- Efficiency It needs about R14.50 in South African rand (about US$0.87) of investment per extra rand of output, versus R3 to R5 (US$0.18 to US$0.30) in the best performers.
- Model Lifting investment toward 30% of GDP alone raises modelled growth from about 1% to about 2%.
- Combined Higher investment plus better efficiency produces a 6% annual growth scenario in Old Mutual’s model.
- Funding About 93% of fixed investment, spending on factories, grid and equipment, comes from domestic saving.
Old Mutual argues that South Africa’s growth problem is as much about what each rand buys as about how many rands are invested.
What the Research Says
Strydom said South Africa has spent years debating how much growth it needs and how much investment that takes. “More capital matters, but it only changes the growth trajectory if it adds productive capacity,” he said.
Saville said no economy in the study had moved from poor to prosperous without materially higher saving and investment. The research adds that the second test is how well the capital is used.
Why It Matters
Old Mutual says South Africa needs R14.50 of investment (about US$0.87) to produce one extra rand of output. The most capital-efficient fast-growing economies in the study need R3 to R5 (about US$0.18 to US$0.30), at an exchange rate of about R16.60 per US$.
That gap explains why the model’s growth gain from investment alone is modest. If higher investment comes with better efficiency, the model reaches 6% annual growth, but that is a scenario and not a forecast.
Where Retirement Funds Come In
Old Mutual says electricity transmission infrastructure can expand the economy’s capacity and offer long-term investments for institutions such as retirement funds. About 93% of South Africa’s fixed investment is paid for by domestic saving, so local savings pools are central to any increase.
Saville warned that if the money simply moves into existing assets without adding productive capacity, “we have not solved the growth problem”.
What It Means for You
Investors in South African assets should treat the 6% case as an upper-end scenario, not a base case. The more useful signal is which projects add real capacity, such as grid links.
What Is Not Known
The figures come from Old Mutual’s own research and modelling, and we have not reviewed the full report. The coverage does not say when investment could reach 30% of GDP.
In Plain English
Capital efficiency means how much extra output each unit of investment produces. Retirement funds are pools of workers’ savings that invest for the long term.
GIBS is the University of Pretoria’s Gordon Institute of Business Science, a business school in Johannesburg.
Frequently Asked Questions
How much does South Africa invest?
Old Mutual’s research says about 14% of GDP on average in the five years to 2025, against roughly 22% for the average economy.
What growth could better investment deliver?
In Old Mutual’s model, more investment alone lifts growth from about 1% to about 2%. Adding better efficiency produces a 6% scenario.
Sources: Old Mutual, “Retirement Saving, Capital Formation and Economic Growth in South Africa” (September 2026), as reported by Business Day, 10 November 2026. Exchange rate: market-data provider RT, R16.60 per US$, 11 November 2026.
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