After the Bell: Does SA finally have a better story to tell at Davos 2025?

16 Jan 2025

While the record seems to be broken, a new tune is playing in the background. This time last year, South Africa had just emerged from a record year of the rolling nationwide power cuts known as ‘load shedding’, while political risk and uncertainty were sky high as the May 2024 elections loomed.

The annual World Economic Forum shindig in the Swiss resort town of Davos begins on Monday, 20 January 2025, and one of the associated rituals is for Team SA to say in advance that South Africa has a “better story to tell”.

True to form, Nedbank CEO Jason Quinn — who is part of Team SA’s business line-up this year — warmed to that well-worn theme on Thursday during a media briefing in Sandton.

“We go this year with a better story,” Quinn said, a view echoed by other members of Team SA.

But is it really?

Well, to be fair, while the record seems to be broken, a new tune is playing in the background. This time last year, South Africa had just emerged from a record year of the rolling nationwide power cuts known as “load shedding”, while political risk and uncertainty were sky high as the elections loomed.

Discovery CEO Adrian Gore noted that at past Davos meetings the concern among investors about electricity “was not just about the issue of energy”.

“It was about a sense of decline and can the country really pull out ... I think what we have gone through over the last year has shown that we can turn things around, and energy is one of them with the others hopefully to come.”

‘A lot more positive’

Standard Bank chairperson Nonkululeko Nyembezi pointed out that investors are “looking at 2025 and beyond, and the story is a lot more positive ... we are at an inflection point”.

“At this time last year, we were still facing an election cycle that looked dire, and the outcomes were very uncertain. And I think because South Africa has a pessimistic bent in its DNA, we all feared the worst.

“The political stability that has come with the Government of National Unity (GNU) is a very important consideration, and it marks a change from the past.”

These are all fair points and, frankly, if South Africa had a worse story to tell than it did 12 months ago — if, say, the power cuts were still raging, and the MK party and its crazy policies were part of the GNU mix — then the country would in effect be radioactive for investors.

But who is the audience for Team SA’s story?

Davos is often regarded as a “talk shop” of note for the top 0.1%, and it is certainly that. The 2025 theme is “Collaboration for the Intelligent Age” — whatever the hell that means.

It’s the kind of place where celebrities such as U2 frontman Bono — who once told the gathering that capitalism was a “wild beast” — can pose and vent about issues.

But it is also essentially a fundraising exercise, an event where countries try to make their investment case to global capital.

And South Africa’s economy, with its relatively low levels of domestic savings — not least because much of the population lives from hand to mouth — desperately needs foreign investment.

So, Team SA needs to be upbeat and fly the flag, and it’s perhaps revealing to note that for the first time in years, President Cyril Ramaphosa will lead the delegation. If South Africa had a demonstrably worse story to tell, one assumes he would not go near the place.

Still, compared with 12 months ago, there are some things that have not changed about the South African investment story.

One big unchanged factor is economic growth. When Davos was held in 2024, the latest data showed that South Africa’s economy in the third quarter (Q3) of 2023 had contracted 0.4% on a quarterly basis after growing 0.6% and 0.7%, respectively, in Q1 and Q2.

This year, the latest data show that the economy shrank 0.3% on a quarterly basis in Q3 in 2024 after flatlining in Q1 and growing just 0.3% in Q2.

Finance Minister Enoch Godongwana said in prepared remarks on Thursday that there were signs of a Q4 rebound.

“There are significant upside risks to growth in the final quarter, including faster-than-anticipated easing of inflationary pressures, improved electricity reliability, and the stimulus effect of the withdrawals of the two-pot retirement system,” he said.

“While the road ahead is challenging, these positive indicators provide a foundation for stronger growth in 2025 and beyond.”

Perhaps, but manufacturing data for the quarter have so far disappointed and one major concern is how poorly the economy has been performing even while Eskom has kept the lights on for the most part — local power outages still happen regularly.

Investors may be looking to the future, but they also look to the past for guidance.

Discovery’s Gore noted that South Africa’s economic growth target was 3%. This, at least, is the stated aim of several of the country’s top CEOs — but he conceded that this would be “incredibly tough. We know that.”

Read more: Heavy hitter CEOs target eye-watering economic growth by end of 2025 and a million jobs by 2030

“But you achieve that through goals and aspirations,” Gore added.

This is also a big difference from last year. No one was talking about 3% growth for South Africa’s economy in January 2024 and, if they were, you would have wondered what they were smoking. DM

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‘A lot more positive’