A recent survey conducted by KPMG Germany and the Southern African-German Chamber of Commerce and Industry (AHK Southern Africa) reveals that German businesses operating in South Africa and neighbouring regions are optimistic about growth prospects in 2025. The survey, conducted late last year, found that 64% of German companies in South Africa anticipate increased sales, while 48% expect improved profits. The positive outlook is linked to the recent political stability following South Africa’s 2024 elections, which brought about a Government of National Unity. Companies believe this new administration could foster reforms that boost economic growth.
Despite this optimism, businesses remain concerned about long-standing issues such as unreliable energy and water supply, logistics challenges, and rising operational costs. Nearly half of the surveyed companies view combatting corruption and improving security as key priorities for the new government. Expanding infrastructure and ensuring stable energy supply are also seen as critical areas requiring attention. Encouragingly, 44% of companies intend to invest in South Africa over the next three years, with some committing at least €3-million to these plans.
South Africa’s appeal as a gateway to other sub-Saharan markets remains strong, with 44% of respondents highlighting this advantage. Additionally, the African Continental Free Trade Area is expected to provide further business growth opportunities. While some companies have seen positive outcomes from trade agreements like the African Growth and Opportunity Act, most report little impact. With a young and growing population, Africa presents significant potential for German businesses looking to expand. The survey underscores the need for consistent reforms to ensure South Africa maintains its position as a leading investment destination in the region.