South Africa’s growth problem cannot be solved by capital alone, according to new research from Old Mutual Corporate, which argues that the country must also improve how effectively every rand of investment is converted into economic output. The finding places questions of project governance, risk allocation and institutional delivery at the centre of the national growth debate.
The research, Old Mutual Corporate: Retirement Saving, Capital Formation and Economic Growth in South Africa (Sept 2026), was produced through a research partnership with Professor Adrian Saville of the Gordon Institute of Business Science (GIBS) and Boundless World. It was presented at the third Old Mutual Thought Leaders Forum in Johannesburg last month, where Old Mutual chief executive officer Jurie Strydom framed its central implication: more capital matters, but it only changes the growth trajectory if it adds productive capacity.
“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,” Strydom said.
The numbers underline the scale of the challenge. South Africa invested an average of about 14% of GDP over the five years to 2025, compared with roughly 22% for the average economy. Saville said the international evidence left little room for ambiguity: without elevated saving and investment, there is no economic growth. Across the countries studied, there was not a single example of an economy moving from poor to prosperous without materially higher saving and investment.
Domestic saving is itself a binding constraint. The research finds that about 93% of South Africa’s fixed investment is financed from domestic saving, which limits how much the country can sustainably invest. But Saville argued that the quantity of capital was only half of the equation, reducing the challenge to two questions: how much a country invests, and how well it invests.
On efficiency, the gap is stark. The research estimates that South Africa currently needs about R14.50 of investment to generate one additional rand of output, compared with roughly R3 to R5 in the most capital-efficient, fast-growing economies in the study.
The modelled scenarios make the stakes clear. 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.
“A larger pool of capital is necessary, but it is not sufficient. If that money simply moves into existing assets without adding productive capacity, we have not solved the growth problem,” Saville said. The test, he argued, was whether investment created the infrastructure, businesses and productive assets that allowed the economy to do more. “The investment needs to have impact.”
The research points to electricity transmission, water systems, rail corridors and ports as examples of long-duration assets that can improve economic capacity and productivity, and notes that such assets can be well matched to long-term institutional investors, including retirement funds. But the need for infrastructure does not, on its own, make a project investable. Projects still require credible economics, appropriate risk allocation, strong governance and returns that justify committing capital over long periods.
Meanwhile, Strydom acknowledged 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,” he said, adding that South Africa’s substantial pools of long-term capital can only be deployed where projects stand on their own merits.
He was emphatic on fiduciary duty. “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,” he said.
Too few projects currently reach the point where long-term investors can commit, making better preparation, clearer risk allocation and stronger governance as important to the growth equation as capital itself. “Capital follows opportunity. The public and private sectors need to create projects that are properly prepared, governed and commercially credible,” Strydom said. “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.”
Further information is available at https://www.businessday.co.za/economy/2026-11-10-sa-needs-more-than-investment-to-unlock-economic-growth-says-old-mutual/