Good governance comes before investment – SBG’s Goolam Ballim

Africa’s opportunity in a changing global economy depends on stronger institutions, greater accountability and predictable governance, alongside its abundant natural resources, according to Standard Bank Group chief economist Goolam Ballim.

“Good governance triggers investment,” he says, adding that the direction is “from governance to investment, not the other way around”.

Read: South Africa economy nears ‘escape velocity,’ Standard Bank says

Ballim made the comments at Standard Bank’s Africa Unlocked conference in Cape Town on Friday.

Momentum in South Africa

South Africa’s own prospects, he says, depend on whether it can continue its reform agenda and turn gradual improvements in electricity and logistics into a broader structural recovery.

“If South Africa can lock in security of energy supply, if the momentum in logistics improvement can continue to show traction, if the GNU [government of national unity] prevails and continues to lock in the reform agenda – and that spills over to municipal and metro coalitions – that could embolden South Africa’s incremental structural uplift,” Ballim says.

(South Africa is due to hold local government elections on 4 November, 2026; where no party secures an outright majority in a municipal council, parties may need to form coalitions to elect mayors and approve budgets and municipal policies.)

South Africa’s prolonged underperformance weighs on growth across southern Africa, lowering the region’s weighted average growth rate.

Read:
Credit ratings won’t matter if corruption drags SA back onto grey list
South Africa secures first Fitch rating upgrade since 2005

But Ballim says the country has hopefully bottomed out after years of negative sovereign credit-rating action and has reached a turning point in 2026.

Standard Bank initially expected the economy to grow by 1.8% in 2026, but that forecast has been altered by the Gulf war and is likely to be revised to about 1.1% or 1.2%.

If early reform momentum is sustained, South Africa could reach an “unflattering” growth rate of about 2% by 2028. While modest, Ballim says that would be symbolic of greater reform traction.

Rating agencies are necessary

The importance of governance and policy certainty in attracting investment was echoed during a later panel discussion at the conference.

Industrial Development Corporation chief executive Mmakgoshi Lekhethe defended the role of credit rating agencies, saying that while they are often unpopular in Africa, they remain important because investors need confidence that countries are safe places to invest.

Rather than abandoning ratings, she argues that the focus should be on ensuring that methodologies accurately reflect the risks facing African economies.

Drawing on her time at the National Treasury, Lekhethe says rating agencies engage governments before taking downgrade decisions and can be persuaded when presented with compelling evidence.

Africa Finance Corporation chief executive Samaila Zubairu says there is now evidence that Africa has significant capital of its own and that Africans are increasingly investing on the continent.

Read: Credit ratings: When the sovereign circuit shorts the street

Standard Bank SA chief executive David Hodnett agrees that Africa should challenge misconceptions about risk by “getting the facts on the table”, but says the continent’s development needs are too large to rely solely on domestic capital.

“We still need global investment into the continent,” he says, adding that Africa should continue looking to its traditional funding markets as growth improves.

Strategic advantage

Ballim argues that one reason Africa is poised to attract renewed investor attention is the changing nature of global competition.

Comparative advantage refers to the unique attributes one economy possesses over another, such as an abundance of platinum or another commodity.

But strategic advantage is becoming the real differentiator, he says.

Listen/read: ‘Africa can and must negotiate from a place of strength on critical minerals’

The countries leading in artificial intelligence, quantum computing and immersive reality will dominate in future, while those that control the critical minerals underpinning those technologies will hold a strategic advantage.

Africa is at the forefront of “almost every sweeping global trend”, Ballim believes.

It possesses the critical and rare-earth minerals needed for renewable energy and technology, including cobalt, graphite, copper and manganese. Southern Africa is also rich in platinum, manganese and lithium.

Africa also has a central role to play in food security, with about 60% of the world’s arable land located on the continent.

“For the first time in decades, the continent has never enjoyed such economic reverence,” Ballim says.

Trust as currency 

Africa is relevant not only because of its resources, but also because of its geography and its potential to become a trustworthy commercial partner.

“The currency is trust,” Ballim says, arguing that commercial trust has become one of the most significant geopolitical ingredients and that countries increasingly seek reliable partners.

Africa can provide such partnerships – it does not need to enter a new Cold War or choose one major power over another.

Listen: Built in Africa: Turning opportunity into growth

Ballim is of the view that the continent should reach towards the Middle East for liquidity, harness its longstanding relationships with Europe, and maintain diplomatic and economic relations with the US.

“US exceptionalism has not come to an end,” he says, stressing that Africa cannot afford to neglect its relationship with the US.

Moreover, he believes US diplomacy in Africa will return out of necessity because of the strategic comparative advantages the continent can offer.