Boosting long-term investment
Home >> Economic >> Financial sector reforms >> Boosting long-term investment

Individual Reform: Boosting long-term investment 2026 - 2027

Capital flows management framework review; fostering business growth, promoting investment in the region, promoting trade; fostering business growth, promoting investment in the region, promoting trade

Summary

These reforms align with the OECD's best-practice Code of Liberalisation of Capital Movements. NT (together with the SARB, Prudential Authority and the FSCA) will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. Overarching reforms include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised dealers (banks trading in foreign exchange) will be permitted to process requests by certain unlisted companies to establish an offshore company and/or have their primary listing offshore to raise foreign loans and capital for their operations. Furthermore, such dealers will be permitted to allow SA private equity funds licensed with the FSCA to invest offshore.

Canvas not supported.

Is it working?

To determine the effectiveness of capital flow management reforms in boosting long-term investment, the research will have to assess changes in FDI and portfolio investment flows, trade volumes, GDP growth, and employment rates. This will require the monitoring of financial market developments and integration, joint infrastructure projects, and regional development initiatives. Furthermore, evaluation will be necessary to determine any improvements in the ease of doing business, regulatory compliance, and harmonisation utilising investor surveys, business confidence indices, and trade and investment agreements.

Actions

Back in 2020, the government outlined reforms to modernise the foreign?exchange system to maximise trade and investment benefits in a globalised capital environment and complement the African Continental Free Trade Agreement, to which South Africa is a signatory. The reforms were aligned to the OECD best?practice Code of Liberalisation of Capital Movements. National Treasury, alongside the Reserve Bank, the Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. This research is intended to generate adjustments to improve alignment of the frameworks and may affect the pace at which these reforms continue to be implemented.

Are there plans?

Key initiatives include enhancing financial system integrity through the Financial Sector Regulation Act, relaxing exchange controls, and establishing special economic zones with tax incentives. The National Infrastructure Plan aims to improve critical infrastructure, while strengthening the JSE and promoting green bonds to attract sustainable investments. Additionally, the National Development Plan (NDP) and sector-specific strategies like the Industrial Policy Action Plan (IPAP) and the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) support economic growth and competitiveness, complemented by human capital development through skills programmes.

Is it on the agenda?

South Africa has implemented a range of regulatory reforms and incentives to attract long-term investments through the management of capital flows. Key regulatory measures include the Financial Sector Regulation Act, which aims to enhance financial system stability, and the relaxation of exchange controls to facilitate greater capital mobility. The establishment of special economic zones offers tax incentives and reduced tariffs to attract foreign direct investment, while investment promotion agencies like InvestSA provide support and facilitate the investment process for foreign investors.

Goals

Reforms to modernise the foreign exchange system to maximise trade and investment benefits in a globalised capital context and complement the African Continental Free Trade Agreement (South Africa is a signatory). Unlisted companies are allowed to invest offshore up to the limit of R5bn in line with FDI. More than R5bn will need SARB approval. SA licensed private equity funds will be allowed to invest up to R5bn offshore, in line with FDI policy.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

These reforms align with the OECD's best-practice Code of Liberalisation of Capital Movements. NT (together with the SARB, Prudential Authority and the FSCA) will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. Overarching reforms include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised dealers (banks trading in foreign exchange) will be permitted to process requests by certain unlisted companies to establish an offshore company and/or have their primary listing offshore to raise foreign loans and capital for their operations. Furthermore, such dealers will be permitted to allow SA private equity funds licensed with the FSCA to invest offshore.

Canvas not supported.

Is it working?

To determine the effectiveness of capital flow management reforms in boosting long-term investment, the research will have to assess changes in FDI and portfolio investment flows, trade volumes, GDP growth, and employment rates. This will require the monitoring of financial market developments and integration, joint infrastructure projects, and regional development initiatives. Furthermore, evaluation will be necessary to determine any improvements in the ease of doing business, regulatory compliance, and harmonisation utilising investor surveys, business confidence indices, and trade and investment agreements.

Actions

Back in 2020, the government outlined reforms to modernise the foreign?exchange system to maximise trade and investment benefits in a globalised capital environment and complement the African Continental Free Trade Agreement, to which South Africa is a signatory. The reforms were aligned to the OECD best?practice Code of Liberalisation of Capital Movements. National Treasury, alongside the Reserve Bank, the Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. This research is intended to generate adjustments to improve alignment of the frameworks and may affect the pace at which these reforms continue to be implemented.

Are there plans?

Key initiatives include enhancing financial system integrity through the Financial Sector Regulation Act, relaxing exchange controls, and establishing special economic zones with tax incentives. The National Infrastructure Plan aims to improve critical infrastructure, while strengthening the JSE and promoting green bonds to attract sustainable investments. Additionally, the National Development Plan (NDP) and sector-specific strategies like the Industrial Policy Action Plan (IPAP) and the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) support economic growth and competitiveness, complemented by human capital development through skills programmes.

Is it on the agenda?

South Africa has implemented a range of regulatory reforms and incentives to attract long-term investments through the management of capital flows. Key regulatory measures include the Financial Sector Regulation Act, which aims to enhance financial system stability, and the relaxation of exchange controls to facilitate greater capital mobility. The establishment of special economic zones offers tax incentives and reduced tariffs to attract foreign direct investment, while investment promotion agencies like InvestSA provide support and facilitate the investment process for foreign investors.

Goals

Reforms to modernise the foreign exchange system to maximise trade and investment benefits in a globalised capital context and complement the African Continental Free Trade Agreement (South Africa is a signatory). Unlisted companies are allowed to invest offshore up to the limit of R5bn in line with FDI. More than R5bn will need SARB approval. SA licensed private equity funds will be allowed to invest up to R5bn offshore, in line with FDI policy.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

These reforms align with the OECD's best-practice Code of Liberalisation of Capital Movements. NT, together with the SARB, Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. Overarching reforms include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised dealers (banks trading in foreign exchange) will be permitted to process requests by certain unlisted companies to establish an offshore company and/or have their primary listing offshore to raise foreign loans and capital for their operations. Furthermore, such dealers will be permitted to allow SA private equity funds licensed with the FSCA to invest offshore.

Canvas not supported.

Is it working?

To determine the effectiveness of capital flow management reforms in boosting long-term investment, the research will have to assess changes in FDI and portfolio investment flows, trade volumes, GDP growth and employment rates. This will require the monitoring of financial market developments and integration, joint infrastructure projects and regional development initiatives. Furthermore, evaluation will be necessary to determine any improvements in the ease of doing business, regulatory compliance and harmonisation, utilising investor surveys, business confidence indices and trade and investment agreements.

Actions

Back in 2020, the government outlined reforms to modernise the foreign?exchange system to maximise trade and investment benefits in a globalised capital environment and complement the African Continental Free Trade Agreement, to which South Africa is a signatory. The reforms were aligned to the OECD best?practice Code of Liberalisation of Capital Movements. National Treasury, alongside the Reserve Bank, the Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. This research is intended to generate adjustments to improve alignment of the frameworks and may affect the pace at which these reforms continue to be implemented.

Are there plans?

Key initiatives include enhancing financial system integrity through the Financial Sector Regulation Act, relaxing exchange controls and establishing special economic zones with tax incentives. The National Infrastructure Plan aims to improve critical infrastructure, while strengthening the JSE and promoting green bonds to attract sustainable investments. Additionally, the National Development Plan and sector-specific strategies like the Industrial Policy Action Plan and the Renewable Energy Independent Power Producer Procurement Programme support economic growth and competitiveness, complemented by human capital development through skills programmes.

Is it on the agenda?

South Africa has implemented a range of regulatory reforms and incentives to attract long-term investments through the management of capital flows. Key regulatory measures include the Financial Sector Regulation Act, which aims to enhance financial system stability, and the relaxation of exchange controls to facilitate greater capital mobility. The establishment of special economic zones offers tax incentives and reduced tariffs to attract foreign direct investment, while investment promotion agencies like InvestSA provide support and facilitate the investment process for foreign investors.

Goals

Reforms to modernise the foreign exchange system to maximise trade and investment benefits in a globalised capital context and complement the African Continental Free Trade Agreement (South Africa is a signatory). Unlisted companies are allowed to invest offshore up to the limit of R5bn, in line with FDI. More than R5bn will need SARB approval. SA licensed private equity funds will be allowed to invest up to R5bn offshore, in line with FDI policy.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

These reforms align with the OECD's best-practice Code of Liberalisation of Capital Movements. NT, together with the SARB, Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. Overarching reforms include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised dealers (banks trading in foreign exchange) will be permitted to process requests by certain unlisted companies to establish an offshore company and/or have their primary listing offshore to raise foreign loans and capital for their operations. Furthermore, such dealers will be permitted to allow SA private equity funds licensed with the FSCA to invest offshore.

Canvas not supported.

Is it working?

To determine the effectiveness of capital flow management reforms in boosting long-term investment, the research will have to assess changes in FDI and portfolio investment flows, trade volumes, GDP growth and employment rates. This will require the monitoring of financial market developments and integration, joint infrastructure projects and regional development initiatives. Furthermore, evaluation will be necessary to determine any improvements in the ease of doing business, regulatory compliance and harmonisation, utilising investor surveys, business confidence indices and trade and investment agreements.

Actions

Back in 2020, the government outlined reforms to modernise the foreign?exchange system to maximise trade and investment benefits in a globalised capital environment and complement the African Continental Free Trade Agreement, to which South Africa is a signatory. The reforms were aligned to the OECD best?practice Code of Liberalisation of Capital Movements. National Treasury, alongside the Reserve Bank, the Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. This research is intended to generate adjustments to improve alignment of the frameworks and may affect the pace at which these reforms continue to be implemented.

Are there plans?

Key initiatives include enhancing financial system integrity through the Financial Sector Regulation Act, relaxing exchange controls and establishing special economic zones with tax incentives. The National Infrastructure Plan aims to improve critical infrastructure, while strengthening the JSE and promoting green bonds to attract sustainable investments. Additionally, the National Development Plan and sector-specific strategies like the Industrial Policy Action Plan and the Renewable Energy Independent Power Producer Procurement Programme support economic growth and competitiveness, complemented by human capital development through skills programmes.

Is it on the agenda?

South Africa has implemented a range of regulatory reforms and incentives to attract long-term investments through the management of capital flows. Key regulatory measures include the Financial Sector Regulation Act, which aims to enhance financial system stability, and the relaxation of exchange controls to facilitate greater capital mobility. The establishment of special economic zones offers tax incentives and reduced tariffs to attract foreign direct investment, while investment promotion agencies like InvestSA provide support and facilitate the investment process for foreign investors.

Goals

Reforms to modernise the foreign exchange system to maximise trade and investment benefits in a globalised capital context and complement the African Continental Free Trade Agreement (South Africa is a signatory). Unlisted companies are allowed to invest offshore up to the limit of R5bn, in line with FDI. More than R5bn will need SARB approval. SA licensed private equity funds will be allowed to invest up to R5bn offshore, in line with FDI policy.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

These reforms align with the OECD's best-practice Code of Liberalisation of Capital Movements. NT, together with the SARB, Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. Overarching reforms include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised dealers (banks trading in foreign exchange) will be permitted to process requests by certain unlisted companies to establish an offshore company and/or have their primary listing offshore to raise foreign loans and capital for their operations. Furthermore, such dealers will be permitted to allow SA private equity funds licensed with the FSCA to invest offshore.

Canvas not supported.

Is it working?

To determine the effectiveness of capital flow management reforms in boosting long-term investment, the research will have to assess changes in FDI and portfolio investment flows, trade volumes, GDP growth and employment rates. This will require the monitoring of financial market developments and integration, joint infrastructure projects and regional development initiatives. Furthermore, evaluation will be necessary to determine any improvements in the ease of doing business, regulatory compliance and harmonisation, utilising investor surveys, business confidence indices and trade and investment agreements.

Actions

Back in 2020, the government outlined reforms to modernise the foreign?exchange system to maximise trade and investment benefits in a globalised capital environment and complement the African Continental Free Trade Agreement, to which South Africa is a signatory. The reforms were aligned to the OECD best?practice Code of Liberalisation of Capital Movements. National Treasury, alongside the Reserve Bank, the Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. This research is intended to generate adjustments to improve alignment of the frameworks and may affect the pace at which these reforms continue to be implemented.

Are there plans?

Key initiatives include enhancing financial system integrity through the Financial Sector Regulation Act, relaxing exchange controls and establishing special economic zones with tax incentives. The National Infrastructure Plan aims to improve critical infrastructure, while strengthening the JSE and promoting green bonds to attract sustainable investments. Additionally, the National Development Plan and sector-specific strategies like the Industrial Policy Action Plan and the Renewable Energy Independent Power Producer Procurement Programme support economic growth and competitiveness, complemented by human capital development through skills programmes.

Is it on the agenda?

South Africa has implemented a range of regulatory reforms and incentives to attract long-term investments through the management of capital flows. Key regulatory measures include the Financial Sector Regulation Act, which aims to enhance financial system stability, and the relaxation of exchange controls to facilitate greater capital mobility. The establishment of special economic zones offers tax incentives and reduced tariffs to attract foreign direct investment, while investment promotion agencies like InvestSA provide support and facilitate the investment process for foreign investors.

Goals

Reforms to modernise the foreign exchange system to maximise trade and investment benefits in a globalised capital context and complement the African Continental Free Trade Agreement (South Africa is a signatory). Unlisted companies are allowed to invest offshore up to the limit of R5bn, in line with FDI. More than R5bn will need SARB approval. SA licensed private equity funds will be allowed to invest up to R5bn offshore, in line with FDI policy.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

Currently, unlisted companies and licensed private equity funds are allowed to invest offshore up to the limit of R5bn, in line with foreign direct investment. More than R5bn requires SARB approval. Overarching reforms to South Africa's foreign exchange system include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised dealers (banks trading in foreign exchange) will be permitted to process requests by certain unlisted companies to establish an offshore company and/or have their primary listing offshore to raise foreign loans and capital for their operations. Furthermore, authorised dealers will be permitted to allow SA private equity funds licensed with the FSCA to invest offshore. Modernising South Africa's foreign exchange system aligns with the OECD's best-practice Code of Liberalisation of Capital Movements. National Treasury, together with the SARB, Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks.

Canvas not supported.

Is it working?

The capital flows management framework is under ongoing review, with reforms praimed at promoting investment and trade. This is not yet concluded as further liberalisation and alignment with international standards are planned. SARB and National Treasury are working on this.

Actions

The authorities have implemented higher offshore limits, allowed easier hedging for exporters, removed most approvals for common cross-border flows and begun updating standards for international transactions. Ongoing policy reviews and exposure drafts, regular market and stakeholder engagement, annual reviews of adequacy and cross-ministry coordination underpin the reform’s momentum.

Are there plans?

There are well-defined, phased plans including technical policy papers, IMF peer reviews, regulatory drafting and extensive stakeholder consultation. Regulatory amendments are scheduled for publication for public comment in 2025. The strategy dovetails with the SA Investment Strategy, new PPP framework and regional integration under AfCFTA. The establishment of special economic zones offers tax incentives and reduced tariffs to attract foreign direct investment, while investment promotion agencies like InvestSA provide support and facilitate the investment process for foreign investors.

Is it on the agenda?

Regulatory reforms and incentives to attract long-term investments through the management of capital flows are firmly on the agenda. Key regulatory measures include the Financial Sector Regulation Act, which aims to enhance financial system stability and the relaxation of exchange controls to facilitate greater capital mobility.

Goals

The goal is to modernise the foreign exchange system to maximise trade and investment benefits in a globalised capital context and complement the African Continental Free Trade Agreement, of which South Africa is a signatory.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

Overarching reforms to South Africa's foreign exchange system include fostering growth of high-potential and innovative businesses, promoting trade and reducing trade-related red tape. Authorised dealers (banks trading in foreign exchange) will be permitted to process requests by certain unlisted companies to establish an offshore company and/or have their primary listing offshore to raise foreign loans and capital for their operations. Furthermore, authorised dealers will be permitted to allow SA private equity funds licensed with the FSCA to invest offshore. Modernising South Africa's foreign exchange system aligns with the OECD's best-practice Code of Liberalisation of Capital Movements. National Treasury, together with the SARB, Prudential Authority and the FSCA, will evaluate the impact of these reforms on the prudential, fiscal and monetary policy frameworks. South Africa continues to modernise the capital flow management framework and institutional investment limits, aiming to encourage stable inflows, market diversification, and regional economic growth​. Technical research and policy reviews are underway, IMF advisory has been completed and public consultations are in progress for further harmonising foreign exposure limits and best practices.
rn
rn

Canvas not supported.

Is it working?

The capital flows management framework is under ongoing review, with reforms praimed at promoting investment and trade. This has not yet been concluded as further liberalisation and alignment with international standards are planned. SARB and National Treasury are working on this. With the reform in progress, market feedback is positive, but updates are needed to align stakeholder practice with new exposure frameworks.

Actions

The authorities have implemented higher offshore limits, allowed easier hedging for exporters, removed most approvals for common cross-border flows, and have begun updating standards for international transactions. Ongoing policy reviews and exposure drafts, regular market and stakeholder engagement, annual reviews of adequacy and cross-ministry coordination underpin the reform’s momentum. SARB and Treasury are conducting policy reviews, with targeted outreach to industry associations and adjustment of implementation protocols.

Are there plans?

There are well-defined, phased plans including technical policy papers, IMF peer reviews, regulatory drafting and extensive stakeholder consultation. Regulatory amendments were scheduled for publication for public comment in 2025. The strategy dovetails with the SA Investment Strategy, new PPP framework and regional integration under AfCFTA. The establishment of special economic zones offers tax incentives and reduced tariffs to attract foreign direct investment, while investment promotion agencies like InvestSA provide support and facilitate the investment process for foreign investors. Plans now include IMFs technical recommendations, phased stakeholder engagement and new reporting requirements for authorised dealers.
rn

Is it on the agenda?

Regulatory reforms and incentives to attract long-term investments through the management of capital flows are firmly on the agenda. Key regulatory measures include the Financial Sector Regulation Act, which aims to enhance financial system stability and the relaxation of exchange controls to facilitate greater capital mobility. This is featured in National Treasury, FSCA and SARB strategic reports and regular Cabinet economic briefings as an active reform priority.

Goals

The goal is to modernise the foreign exchange system to maximise trade and investment benefits in a globalised capital context and complement the African Continental Free Trade Agreement, of which South Africa is a signatory. Ultimately, the reform should deepen domestic/foreign capital markets and foster business investment and trade.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

Key deliverables are: (i) a scaled, well‑governed infrastructure pipeline, with R1.07 trillion of public‑sector infrastructure spending over 2025/26-2028/29 and an expanded Budget Facility for Infrastructure (BFI) that runs multiple annual bid windows and screens projects for quality and readiness; (ii) a new class of sovereign Infrastructure and Development Finance Bonds, first issued in December 2025, which raise earmarked funding for BFI projects at long maturities (10‑ and 15‑year tranches) and will be tapped in future auctions; (iii) reforms to the PPP framework and institutional arrangements (including the Infrastructure Finance and Implementation Support Agency) to crowd in private capital; and (iv) improved long‑term savings incentives via increased tax‑free savings and retirement‑fund deduction caps, supporting domestic pools of patient capital.

Canvas not supported.

Is it working?

The combination of larger, more clearly financed infrastructure plans, a dedicated infrastructure bond programme and improved project‑selection mechanisms represents a meaningful strengthening of the long‑term investment framework, and early investor response to the infrastructure bond issuance has been strong. The crucial tests will be execution – actually translating allocations and bond proceeds into completed, value‑for‑money projects – and whether regulatory and governance reforms (PPP rules, implementing‑agency capacity, SOE reform) are sufficient to overcome historic bottlenecks and crowd in private and institutional capital at scale rather than simply increasing public debt.

Actions

Actions already implemented include: (i) scaling up infrastructure allocations across spheres of government and SOEs, with detailed project lists in Annexure D of the Budget Review; (ii) reconfiguring the BFI to run four bid windows annually and to integrate more closely with the Infrastructure Fund at DBSA; (iii) launching and successfully issuing South Africa’s first sovereign Infrastructure and Development Finance Bond in December 2025, raising R11.795bn for BFI‑eligible projects; (iv) publishing new and revised PPP regulations for national and provincial government (with municipal amendments due by June 2026); and (v) increasing the tax‑free savings account limit from R36 000 to R46 000 and the retirement‑fund deduction cap from R350 000 to R430 000 per year, explicitly to encourage higher long‑term saving.

Are there plans?

Planned steps include: (i) continued expansion of the Infrastructure and Development Finance Bond programme, with future taps and potentially additional maturities; (ii) full operationalisation of the Infrastructure Finance and Implementation Support Agency (within National Treasury and DBSA) to help departments and SOEs prepare bankable projects; (iii) further reforms to PPP regulations (national and municipal) and standardised documentation to reduce delays and transaction costs; (iv) ongoing improvement of the BFI project‑screening and monitoring framework; and (v) complementary tax and regulatory reforms (for example, retirement and insurance reforms, green‑finance incentives) to channel institutional savings into long‑term assets.
rn

Is it on the agenda?

The 2026 Budget and Budget Speech repeatedly highlight infrastructure and long‑term investment as central to the growth strategy, with public‑sector infrastructure spending of R1.07 trillion over the medium term and a clear shift in the composition of expenditure from consumption to investment. The Budget notes the successful launch of the first Infrastructure and Development Finance Bond in 2025 (R11.795bn raised, 2.2× oversubscribed) and signals ongoing issuance; it also stresses reforms to PPP regulations, the Infrastructure Fund and the new Infrastructure Finance and Implementation Support Agency as key to unlocking private investment.

Goals

The goal is to raise long‑term, patient capital for infrastructure and productive investment by shifting public spending towards capital, crowding in private and institutional investors and improving the pipeline, financing instruments and governance needed to sustain investment over decades.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Summary

Key deliverables are: (i) a scaled, well‑governed infrastructure pipeline, with R1.07 trillion of public‑sector infrastructure spending over 2025/26-2028/29 and an expanded Budget Facility for Infrastructure (BFI) that runs multiple annual bid windows and screens projects for quality and readiness; (ii) a new class of sovereign Infrastructure and Development Finance Bonds, first issued in December 2025, which raise earmarked funding for BFI projects at long maturities (10‑ and 15‑year tranches) and will be tapped in future auctions; (iii) reforms to the PPP framework and institutional arrangements (including the Infrastructure Finance and Implementation Support Agency) to crowd in private capital; and (iv) improved long‑term savings incentives via increased tax‑free savings and retirement‑fund deduction caps, supporting domestic pools of patient capital.

Canvas not supported.

Is it working?

The combination of larger, more clearly financed infrastructure plans, a dedicated infrastructure bond programme and improved project‑selection mechanisms represents a meaningful strengthening of the long‑term investment framework, and early investor response to the infrastructure bond issuance has been strong. The crucial tests will be execution – actually translating allocations and bond proceeds into completed, value‑for‑money projects – and whether regulatory and governance reforms (PPP rules, implementing‑agency capacity, SOE reform) are sufficient to overcome historic bottlenecks and crowd in private and institutional capital at scale rather than simply increasing public debt.

Actions

Actions already implemented include: (i) scaling up infrastructure allocations across spheres of government and SOEs, with detailed project lists in Annexure D of the Budget Review; (ii) reconfiguring the BFI to run four bid windows annually and to integrate more closely with the Infrastructure Fund at DBSA; (iii) launching and successfully issuing South Africa’s first sovereign Infrastructure and Development Finance Bond in December 2025, raising R11.795bn for BFI‑eligible projects; (iv) publishing new and revised PPP regulations for national and provincial government (with municipal amendments due by June 2026); and (v) increasing the tax‑free savings account limit from R36 000 to R46 000 and the retirement‑fund deduction cap from R350 000 to R430 000 per year, explicitly to encourage higher long‑term saving.

Are there plans?

Planned steps include: (i) continued expansion of the Infrastructure and Development Finance Bond programme, with future taps and potentially additional maturities; (ii) full operationalisation of the Infrastructure Finance and Implementation Support Agency (within National Treasury and DBSA) to help departments and SOEs prepare bankable projects; (iii) further reforms to PPP regulations (national and municipal) and standardised documentation to reduce delays and transaction costs; (iv) ongoing improvement of the BFI project‑screening and monitoring framework; and (v) complementary tax and regulatory reforms (for example, retirement and insurance reforms, green‑finance incentives) to channel institutional savings into long‑term assets.
rn

Is it on the agenda?

The 2026 Budget and Budget Speech repeatedly highlight infrastructure and long‑term investment as central to the growth strategy, with public‑sector infrastructure spending of R1.07 trillion over the medium term and a clear shift in the composition of expenditure from consumption to investment. The Budget notes the successful launch of the first Infrastructure and Development Finance Bond in 2025 (R11.795bn raised, 2.2× oversubscribed) and signals ongoing issuance; it also stresses reforms to PPP regulations, the Infrastructure Fund and the new Infrastructure Finance and Implementation Support Agency as key to unlocking private investment.

Goals

The goal is to raise long‑term, patient capital for infrastructure and productive investment by shifting public spending towards capital, crowding in private and institutional investors and improving the pipeline, financing instruments and governance needed to sustain investment over decades.

References

Departments / Govt Institutions

Financial Intelligence Centre (FIC) Financial Sector Conduct Authority (FSCA) National Treasury Prudential Authority South African Reserve Bank (SARB)

Analyst: Tinashe Kambadza
Status: in-progress
Last Updated:
Next Update:
Got an Update? Follow this reform
Reform Area:
Reform:

    If you would like to alert our analysts to an update you are aware of in this particular reform area, please complete the form below and submit it to us. Please ensure you include links to any press releases or other documents to confirm the reforms and provide detail to allow our analysts to assess the changes. Our team will review it.