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The most important number that underpins the stability of both South Africa’s economy and its politics is the fixed investment rate. This measures the share of total GDP that fixed investment makes up. It is the definitive number on confidence in the policies of the government and dictates the rate of economic growth.

Since 2008, South Africa’s fixed investment rate has followed a pronounced downward trend, falling from 21.6% of GDP to 13.9% in 2025. That is a decline of 7.7 percentage points, equivalent to 35.6% of the original investment rate, as shown on the chart below.

The decline has been interrupted by temporary recoveries. The rate recovered to 18.6% in 2013 before falling to 15.5% in 2019 and 13.1% in 2021. It then recovered to 14.9% in 2023 before declining again. The overall picture is that South Africa is devoting a substantially smaller share of its economic output to fixed investment than it did in 2008, with successive recoveries failing to restore earlier levels.

By international standards, the figure is very low. The chart below shows the numbers for BRICS countries since 1994.

The latest seasonally adjusted and annualised figure was just 13.7% of GDP in the second quarter of 2026. This was up from the awful 13.2% in the first quarter, an improvement of 0.5 percentage points, but remained below 14.0% a year earlier.

Frans Cronje told The Common Sense that, at these levels, “the number may still be called the investment rate but it is in practice a care and maintenance rate and means that almost nothing by way of serious investment is entering the economy”.

The trouble with that is set out on the chart below, which measures the fixed investment rate against the rate of economic growth for South Africa since 1994.

This demonstrates a very important lesson. South Africa needs to hike its investment rate to well over 20.0% of GDP to start getting its economic growth rate up to emerging market averages.

The importance of that is shown on the following chart, which tracks the rate of economic growth against the number of people in employment since 1994.

Cronje said,“What these charts start to demonstrate is the chain of cause and effect that shapes living standards in South Africa. We can take that chain further and link it to African National Congress (ANC) support, as support for that party has risen and fallen in the same broad patterns as we have seen in fixed investment, living standards, and jobs.”

The chart below shows the number of people with jobs in South Africa compared to ANC support in national elections since 1994.

Cronje said, “The abiding mystery of my career is why the ANC will not understand this relationship. I read earlier this week the comments of that party’s secretary-general about investment and the conditions that the party continues to attach to permitting such investment, and I thought, again, ‘Here you have exactly the reason why that party is in so much trouble and polling at such lows.’”

Earlier this week Fikile Mbalula, who is the secretary-general of the ANC, wrote in an opinion article, in response to concerns raised about the investment rate, that “we are willing to discuss how our rules can work better and attract more investment, but sector rules cannot be waived by diplomatic agreement, nor can they be imposed from Washington. The question is not whether foreign companies can operate in South Africa – they have and continue to do so successfully. The question is whether they are willing to do so as partners in our national project, rather than as extractors.”

Cronje said, “Talking about policies and setting conditions for investors is not the way to go about things when you look at the data trendline on fixed investment of the past decade, and that the number is still falling. If South Africa were growing strongly, had a low unemployment rate, and the ANC were firmly in power, then one might understand such an approach. But those are not the facts as the party faces them.”

The latest polls from both South Africa’s Social Research Foundation and News24 have the ANC polling in the 30% region, which is a good 50 percentage points down from the near 70.0% of the vote that the party held at its peak in 2004, four years before the fixed investment rate reached its post-1994 peak in 2008.

“Put differently,” Cronje said, “I don’t understand the downside that the ANC sees in allowing investment into the country and letting its economy grow. I do not see where that harms them or why. Corruption is of course one factor, but many countries are corrupt and yet also go out of their way to allow investment into the country, resulting in high levels of growth. Some of these have even come to understand that this may make it easier for the political elite to skim a percentage off the top.”

“In South Africa’s case, the investment blockage is not as simple as corruption but rather extends to an edifice of policy that is openly hostile to investment and creates an economic climate in which South Africa just does not cut it from a competitiveness perspective.”

The Common Sense has produced, and recently updated, a set of scenarios that estimate the consequences and likely trajectory South Africa will follow over the next decade. The latest update assigns a 65.0% probability to a break-up of the union into a series of competing enclaves, some of which will be among the world’s most dynamic emerging markets. A 15.0% probability is assigned to the ANC changing tack on policy to allow more investment. A 20.0% probability is assigned to an extreme downside case of long-term recession.