South Africa's economy grows 0.8 percent as SMMEs remain hamstrung
Even as the economy gains 0.8% in the second quarter, the job creation target remains distant.
Image: Ron | IOL
South Africa’s economy eked out growth of 0.8% in the second quarter of 2025, a step up from the meagre 0.1% recorded in the first three months of the year.
Mining and manufacturing carried the rebound, but momentum remains far off the 3% target government and business set to create a million jobs. Forecasts for the year still hover around just 1%.
Deputy Trade and Industry Minister Zuko Godlimpi admitted the economy is hamstrung by structural barriers that continue to sap confidence and investment, from energy insecurity to outdated infrastructure.
Godlimpi said a key priority of the reform agenda is breaking up market concentration and boosting SMMEs to drive inclusive growth.
“This is not merely about economic growth in numeric terms; it is rather about a structural shift in our economy,” he said.
“A shift that enables greater participation by previously marginalised communities, supports localisation, strengthens our industrial base, and enhances our global competitiveness," Godlimpi said.
Godlimpi warned that entrenched market dominance is choking innovation and limiting opportunity.
“We continue to face deeply entrenched patterns of market dominance across sectors, where a small number of firms exert considerable control over key inputs, supply chains, as well as consumer markets.
"This concentration limits innovation, raises the cost of doing business, and solidifies barriers to entry – particularly for new enterprises, black-owned businesses, and SMMEs,” Godlimpi said.
Statistics South Africa reported that mining jumped 3.7% in the second quarter, fuelled by platinum group metals, gold and chromium ore.
Manufacturing climbed 1.8%, with petroleum, chemicals and motor vehicles among the top performers.
Trade, catering and accommodation rose 1.7% as retail, hospitality and food services picked up.
But not all sectors shared in the momentum. Transport, storage and communication shrank 0.8% on weaker land transport, while construction slipped 0.3% as residential and non-residential building slowed.
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