It’s that time of year when columnists make profoundly deep and meaningful predictions after gazing into the crystal ball. But first, a radical detour. Can people stop serving San Pellegrino water in restaurants in South Africa?
It drives me mad. When questioned, the “waitrons” apologise and say local patrons enjoy the foreign brand. Sometimes they will offer a local alternative, but not always.
The madness of importing water from the other side of the world seems lost on people. There is surely a gap in the market here for a “fashionable” bottle of expensive sparkling stuff. Similarly, it drives me spare when on safari the guide whips out the most basic and cheap UK gin for a sundowner, rather than one of the far superior local varieties — again because locals apparently prefer a foreign label.
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If only the localisation and industrialisation debates in South Africa were this obvious. Which brings us to the outlook for 2026. How many times in the new year will the ANC double down on its chosen industrial policy interventions, particularly in ferrochrome and smelting?
The issue is likely to become a major theme of 2026 — especially in the run-up to the local government elections. Some businesses are expected to cross-subsidise a relatively small number of jobs (but importantly — as Meridian has shown — cross-subsidies that have to grow over time). Why not more labour-intensive sectors such as business process outsourcing receiving electricity subsidies?
Or textiles? Even that is more labour intensive. Or agriculture?
The lack of a thought-through set of trade-offs and joined-up policy will eventually come home to roost in 2026 as regulators, businesses and the electorate push back — either to end the policy if it starts or, as we are seeing already from negotiations between the smelters and Eskom, stop it from just getting off the ground. Eskom’s CEO has already come out against the idea — precisely because to smelter workers and the industry itself and its political interests, the narrative will be “the government is rescuing you”, but to everyone else in the country it will be, “Eskom is pushing up prices even further and faster”. Another key question for 2026 is how much macroeconomic policy reform can boost growth.
The yield curve has fallen meaningfully in 2025, and businesses and individuals need to get used to the optics and opportunities of borrowing at order-of-magnitude lower interest rates. Much of this is tracking the lower inflation target and lower expected future inflation (itself a positive), but 2026 is set to be the year in which we are likely to see real rates across the yield curve fall, which should in theory have a larger impact on growth. Are businesses and individuals ready for this?
Ready for considering lower threshold rates of return on investments for projects (if your comparator rate of return — the 10-year bond, say, is so much lower)? Do boards know to discuss this and plan off the back of it?
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