64% of German companies surveyed expect rising revenue in South Africa

Following the elections in South Africa, German companies are cautiously optimistic and expect high investment momentum: 44% plan to invest in the country within the next three years, 10% at least three million euros

• 77% expect the economic environment in South Africa to improve in the future – but only 12% expect significant improvements
• Positive profit expectations: 48% of companies in South Africa and 35% in the Southern Africa region* expect profits to rise
• Top 3 growth factors: improvement in political stability (50%), reduction of bureaucratic hurdles (44%) and stricter anti-corruption measures (35%)
• Top three demands on the new South African multi-party government: systematically fight corruption and crime (each 46%) and modernize infrastructure (39%)

The fundamentally positive assessment is also reflected in a strong willingness to invest: 44% of German companies are planning to invest in South Africa in the next three years – 10% of them with a volume of at least three million euros. In the other countries of Southern Africa, however, investment momentum is significantly lower: Only a fifth of companies (20%) have investment plans; only 3% want to invest more than three million euros.

Regarding the economic climate, the picture is ambivalent: almost eight out of ten respondents (77%) believe that the outcome of the elections will have a positive impact on the economic climate. However, 65% expect only moderate improvements.

These are the key findings of the "German-Southern African Business Outlook 2025". The survey by KPMG Germany (KPMG) and the Southern African-German Chamber of Commerce and Industry (AHK Southern Africa) was conducted between 11 November and 31 December 2024. It analyses the business expectations of the member companies in the region.

"Following the parliamentary elections in South Africa in May 2024, the new government of national unity was formed. Local companies are cautiously optimistic that reforms could come from this government and that their businesses will grow in 2025. In recent years, problems with energy and water supply and transport logistics as well as rising costs coupled with falling productivity have put a strain on the business activities of many companies," says Andreas Glunz, Managing Partner International Business at KPMG Germany. "The new government now has the opportunity to create the conditions for growth through infrastructure programs and a sustained fight against corruption and crime."

Almost one in two companies (46% each) see the systematic fight against corruption and crime as the most important tasks of the new South African multi-party government. 39% see the expansion and modernization of infrastructure as a crucial field of action, 28% a stable energy supply.

Sales growth is the top priority for 71% of the companies surveyed in South Africa. 61% want to expand their market share. 42% are aiming to reduce their costs.

"South Africa is an attractive location for the German economy. Many companies are focusing on the medium-term prospects and potential in the country – and these are huge," says Simone Pohl, AHK Southern Africa CEO. "Many of our more than 500 member companies have been in the country for a long time and are correspondingly resilient and operating successfully.”

Every second company (50%) sees reliable political framework conditions as the most important influencing factor for their future business development in South Africa. 47% seek reduction of bureaucratic hurdles. A good one in three respondents (35%) are convinced that stricter anti-corruption measures would have a positive impact on their own business.

"The current reform efforts in South Africa are opening up new opportunities for economic growth. If the government continues to pursue its course consistently, the country can further consolidate its position as a leading business location in sub-Saharan Africa. German companies are ready to actively shape this change and make long-term investments," comments Peter van Binsbergen, President of AHK Southern Africa.

A reliable energy and water supply (30%) and an improved security environment (29%) also received high approval ratings.

For 44% of companies, access to other markets in sub-Saharan Africa represents a decisive locational advantage for South Africa. In addition, 38% of respondents rate the existing ecosystem of suppliers as positive. 35% appreciate the regulatory and business environment.

A third of the companies surveyed (33%) expect the African Free Trade Area of 55 African countries, which has been in place since 2021, to have a positive impact on their business in Southern Africa.

Just over a quarter of companies (28%) report positive or even very positive effects from the African Growth and Opportunity Act. This trade agreement grants forty countries in sub-Saharan Africa duty-free access to the US market. It currently runs until September 2025.