South Africa’s growth debate is usually about how much capital the country can raise. New research from Old Mutual Corporate flips that question toward the institutions that prepare, govern and deliver the investment pipeline. The study, Old Mutual Corporate: Retirement Saving, Capital Formation and Economic Growth in South Africa (September 2026), puts the burden of proof on decision-makers and oversight structures, not only on those who supply the money.
The numbers frame the accountability problem. South Africa needs about R14.50 of investment to generate one additional rand of output, against roughly R3 to R5 in the most capital-efficient, fast-growing economies covered in the study. Investment averaged about 14% of GDP over the five years to 2025, compared with roughly 22% for the average economy in the sample. The work was produced through a research partnership with Professor Adrian Saville of GIBS and Boundless World.
Additional reference context is available at https://fm.co.za/news-and-fox/2026-11-06-why-more-investment-alone-won-t-unlock-south-africa-s-growth-potential/.
Speaking at the third Old Mutual Thought Leaders Forum, held at the Marriott Hotel Melrose Arch in Joburg on October 8, Old Mutual Chief Executive Officer Jurie Strydom made the governance point explicit. “South Africa has spent years debating how much growth we need and how much investment it will take to get there. We also need to ask what happens to a rand once it is invested. More capital matters, but it only changes the growth trajectory if it adds productive capacity.”
Saville was blunt on the quantity side. “If you do not have elevated saving and investment, you will not get economic growth. Full stop.” Across the countries studied, he said, no economy moved from poor to prosperous without materially higher saving and investment. The research also shows that about 93% of South Africa’s fixed investment is financed from domestic saving, which makes the country’s capital base a binding constraint on how much it can sustainably invest.
What the modelling shows is that volume without governance delivers weak returns. Raising investment from around 14% of GDP towards the 30% achieved by high-saving economies, while leaving capital efficiency unchanged, lifts modelled growth from roughly 1% to about 2%. Improving capital efficiency alone gets growth closer to 3%. Combined, the model produces a substantially stronger outcome, including a 6% annual growth scenario. Saville compressed the point: “The investment needs to have impact.”
That framing shifts attention to project preparation, risk allocation and governance, the stages where public institutions and private investors must align. The research points to electricity transmission, water systems, rail corridors and ports as long-duration assets capable of improving economic capacity and productivity. Strydom acknowledged the progress being made through the Presidency to strengthen the infrastructure pipeline, including through Infrastructure South Africa, and efforts to improve how projects are planned, prepared, financed and delivered.
“This is important progress. The next step is to convert more of that pipeline into projects that are commercially credible and investable. South Africa has substantial pools of long-term capital, but that capital can only be deployed where projects can stand on their own merits,” he said.
The accountability question runs in both directions. These assets can be well matched to long-term institutional investors, including retirement funds, but a need does not by itself make a project investable. Projects still require credible economics, appropriate risk allocation, strong governance and returns that justify committing capital over long periods. Strydom insisted that fiduciary responsibility must remain central. “Retirement capital belongs to members. The standard cannot be lowered because the country needs infrastructure. The opportunity is to create projects that can compete for that capital on their own merits.”
Too few projects currently reach the point where long-term investors can commit. Better project preparation, clearer risk allocation and stronger governance are therefore as important to the growth equation as the availability of capital itself. Strydom argued the next step is to improve the quality and depth of the pipeline available to long-term investors. “Capital follows opportunity. The public and private sectors need to create projects that are properly prepared, governed and commercially credible. Investors then have a responsibility to assess those opportunities rigorously and back them where the case holds. If we can increase the capital available and improve what that capital finances, we give South Africa a much stronger foundation for growth.”
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