Neelam Rahim | neelam@radioislam.co.za
3-minute read | 17 October | 13:18 CAT

📸 Economic analyst Rashad Amra unpacks South Africa’s fragile recovery, warning that despite lower inflation and improved power supply, unemployment and fiscal strain still cloud the outlook.

South Africa’s economy is showing signs of fragile stability after years of turbulence, but analysts warn that growth remains too weak to tackle the country’s deep-seated crises of unemployment, poverty, and inequality.

Speaking in this week’s ASRI Report, economic analyst Rashad Amra said that while conditions are “calmer compared to where we were two or three years ago,” the economy is far from strong. Inflation has cooled, the rand is steadier, and electricity supply has stabilised with “very few days of load shedding” in the past year, yet overall growth sits at a modest 1%.

“We’ve seen progress, but not nearly enough to absorb all of those unemployed individuals or make a dent in poverty,” said Amra. “It’s better than where we were, but not where we need to be.”

Amra dismissed attempts to credit the Government of National Unity (GNU) for these marginal gains, explaining that reforms at Eskom and other key sectors predated the GNU. “The GNU may have made more market-friendly statements, but it hasn’t manifested in significant policy change,” he said. “The real difference came from management shifts at Eskom and Ramaphosa’s long-term reform agenda through Operation Vulindlela.”

While inflation has eased, ordinary South Africans continue to feel the pinch. “Supermarkets are quick to raise prices when fuel goes up, but slow to lower them when it drops,” Amra noted, describing what economists call “price stickiness.” Combined with slow wage growth and persistent inefficiencies in logistics, households remain under pressure despite improved macroeconomic indicators.

On the energy front, Amra welcomed the publication of the Integrated Resource Plan 2025, saying it reflects a more cost-sensitive and transparent approach than past strategies. “Private generation is being embraced, and if done with good contracting and regulation, it could be a real game-changer for South Africa’s energy future.”

However, unemployment remains the country’s greatest challenge. The expanded unemployment rate sits around 40%, driven by a mismatch between education and labour market needs. “Too many young people leave school or college without practical skills,” he warned. “We need a tertiary system that responds to the needs of a real economy.”

The upcoming medium-term budget will test Treasury’s ability to balance competing priorities. With the U.S. cutting PEPFAR funding for HIV and TB, a program worth up to R5 billion annually, government now faces a funding shortfall of unprecedented scale. Treasury has allocated R750 million to fill the gap, a figure Amra says is “woefully short” of what’s needed. “If government doesn’t step in, it will become a real social and human crisis.”

Looking beyond South Africa’s borders, Amra pointed to glimmers of opportunity. The Southern African stone fruit industry’s access to Chinese markets is one such example. “It’s a positive blip, but we’ll need sustained diversification in exports to make it a trend,” he said. “Export diversification is absolutely critical in this volatile, multipolar world.”

While signs of progress are visible, Amra’s conclusion was clear and cautious: “We’re steadier than before, but far from secure. Without bold, sustained action, South Africa’s recovery risks losing its footing.”

Listen to the full ASRI Report on Sabahul Muslim with Moulana Sulaimaan Ravat and Rashad Amra.