South Africa Economic Outlook - September 2025
Megatrends are driving a global geoeconomic reconfiguration and creating opportunities for South African exporters due to policy shifts in key trading partners
Johannesburg, 23 September 2025 – PwC Strategy&1 is pleased to share its latest South Africa Economic Outlook report. In this document, entitled “Megatrends are driving a global geoeconomic reconfiguration and creating export opportunities”, we look at changing global trade dynamics, and the export opportunities that could come from shifts in policies and regulations in South Africa’s major trading partners.
The world is currently experiencing a global geoeconomic reconfiguration that is dramatically changing the rules of the game. PwC’s Global M&A Industry Trends 2025 Mid-Year Outlook found that global mergers and acquisitions (M&A) volumes declined 9% year-on-year (y-o-y) in 2025H1—with one in three US companies having paused or revisited deals in response to US import tariff uncertainties.
“Measurements of global uncertainty have reached new highs. Many are blaming the dramatic shift in US tariffs as the cause of this. However, trade disruption is just one of the global shifts that is impacting the world economy in 2025. The shifts include climate change, technological disruption, demographic change and a fracturing geopolitical world, as well as the impact of these factors on social stability. For South African business leaders, the changing global order requires a rethink of how their company makes money and how this will change in the next few years.”
PwC’s five Megatrends—climate change, technological disruption, demographic shifts, a fracturing world and social instability—explain current local and global shifts and why this is elevating uncertainty across the world. The volatility in global trade governance—a product of the fracturing world—is the shock event garnering the most headlines at present. Beyond tariffs, tech regulation and climate policy are other major drivers of the global agenda at present. Artificial intelligence (AI) is creating the potential for a productivity revolution to supercharge business growth. In turn, the rising frequency of extreme weather events is about to impact some of our baseline assumptions about economic growth.
For South African business leaders, the current pace of change in some of the Megatrends creates a cascading flow of uncertainty. How would these Megatrends impact, for example, South Africa’s exports? This is not a trivial question: the country is, after all, pursuing an export-oriented growth strategy to stimulate economic growth and job creation. And, according to our calculations, around 1.7 million jobs in South Africa are directly created and/or supported by exports.
Policymakers globally are also grappling with how to respond to these global trends. To better understand what this could mean for South Africa, we created a simulation of possible policy responses to these global changes by the country’s ten largest export partners. Our calculations show that policy shifts could yield a potential extra boost in export revenues of R188 billion towards 2030, compared to the baseline. In different countries, these shifts could include, for example, investments in technological development and the hydrogen economy which would, in turn, increase demand for South African exports of platinum group metals (PGMs).
The future of trade is increasingly unpredictable, with significant disruptions expected towards 2030 from evolving geopolitics and regulations, rapidly changing consumer preferences, workforce shortages and technological advancements. This requires South African exporters to reinvent themselves to benefit from the opportunities created by shifts in trading partner policies.
“Today’s c-suite faces the dual challenge of addressing immediate hurdles while preparing to leverage powerful, long-term shifts in the market. Some South African business leaders will look back at the next few years as a formative time when they learned to adapt and thrive by radically transforming how they create, deliver and capture value, both locally and abroad. Others will, in the absence of business model reinvention, see their companies fall behind rivals, destined to play a frustrating game of catch-up. The choice is obvious.”
Moving forward in these turbulent times will require going beyond the usual responses to disruption such as slashing costs or transforming operating models. Business model reinvention (BMR) involves rethinking the essential parts that drive a business—like the value it offers, how it makes a profit, its core capabilities, processes and resources. Action is the key here: South African export-oriented companies will have to reinvent their business model or risk falling behind competitors.
BMR is a complete reimagining of how a company creates, delivers and captures value. The approach is grouped into three themes:
- Business model innovation: As industry boundaries blur, smart companies will seek out new models that transform how they work. Whether a company is motivated by the carrot of revenue growth, the stick of rising competitive pressure or both, our research suggests that when companies take actions to reinvent their business model, they enjoy higher profit margins.
- Operating model innovation: The operating model is the beating heart of a company, essential to how it functions, competes and grows. And given new developments in AI and other advanced technologies, leaders have an unprecedented chance to address any number of operational priorities, such as building climate-resilient supply chains, rewiring functions and tasks or pursuing growth through operating model transformation.
- Strengthen critical capabilities: Every company has strengths and weaknesses in capability development, but three capabilities deserve close attention due to their direct link to value creation: ecosystem cultivation, deal-making, and risk management. These are crucial in a world where advanced technologies, climate change and shifting geopolitics demand radical rethinks.
“Shortsighted business leaders tend to view changing policies and regulations as costs of doing business and requirements to comply with. Too few leaders recognise the potential upside: how climate regulation can drive innovation, or how aligning business model changes with tax incentives and desired outcomes can help fund business model reinvention. Companies whose leaders can embrace such connections will have a decided advantage in the decade ahead”.
As a first step towards acting, it is essential for business leaders to understand when the time is right to reinvent their organisation. To help with that challenge, we have conceptualised industry- and sector-level measures that could together act as bellwethers of impending BMR, leading the way. These include company performance indicators, industry attractiveness, investment in innovation, revenue and other shocks and changes in regulation.
When companies are wrestling with timing risk in a fast-moving world, these indicators might help them choose the right moment to begin reinventing their business. In commercial banking, for example, our estimates show that the pressure to reinvent—and the need to act quickly—has been elevated in South Africa since 2020. This is evident from rising levels of non-performing loans (NPLs), an increase in the number of competitors in the banking market, weak growth in inflation-adjusted sector revenues, changes in regulation and compliance requirements, as well as shifts in the market share between traditional and new (e.g. fintech) companies.
Key content in this report includes:
- Accelerating Megatrends: Global uncertainty reaches new highs in a fracturing geopolitical world.
- Not just tariffs: Climate and tech policy shifts that SA’s major trading partners are making.
- Impact simulation: Opportunities that global shifts could present SA exporters towards 2030.
- Business model reinvention: Transforming how export-oriented businesses create and deliver value.
- How we can help with business model reinvention.
Contact us
Verena Koobair
Head of Communications and Societal Purpose Firm Pillar Lead, Strategy& South Africa
Tel: +27 (0) 11 797 4873
