South Africa’s fixed investment plans suffered a heavy blow in the first half of 2026 as business confidence weakened.
Nedbank’s latest Capital Expenditure Project Listing shows that the value of newly announced projects fell by 81% to R137.7 billion, compared with R718.5bn recorded in 2025.
According to Nedbank, the war involving Iran and its potential effect on production inputs such as fuel, chemicals and fertiliser weighed on business confidence. Significant spare capacity, reflecting lacklustre global and domestic demand, also reduced the incentive for firms to expand.
The private sector accounted for 77.8% of new investment plans, with announced projects valued at R107.1bn.
Renewable energy projects remained the dominant theme in the investment pipeline. However, Nedbank noted a rise in new projects announced in consumer facing manufacturing and commercial property.
The public sector accounted for a smaller share of total announcements. Nedbank said this followed a surge in project announcements in 2024, many of which appear to have progressed to implementation and could feed through into gross fixed capital formation figures.
The concentration of announced projects in energy underlines the importance of expanding and diversifying South Africa’s electricity supply. Smaller investments in Coca Cola, hospitality, retail and property suggest that domestic demand and business confidence had begun to improve before the war involving Iran, although these projects remained secondary to renewable energy investment.
Nedbank forecasts gross fixed capital formation growth of 0.6% in 2026, followed by average growth of 2% over the next three years.
The bank said the slowdown in the first half of the year reflected a decline in the number of new projects announced across sectors.
Renewable energy projects made up more than half of the total value of projects announced. The largest single project is Coca Cola’s R17.6bn expansion programme, which aims to increase production capacity, strengthen distribution and logistics, promote innovation across its product range, and expand activity among local suppliers and business partners.
There was also a strong focus on property development, including the Waterfall City Conference Centre and Hotel, the Tecoma Park multi-user development and Quay 7.
Public sector announcements accounted for 22.2% of total announcements and consisted of two projects worth a combined R30.6bn.
These included the planned refurbishment of the Strandfontein Pavilion and a 100MW solar photovoltaic facility within the Coega Special Economic Zone.
The electricity, gas and water sector led project announcements, with renewable energy forming the core of new projects. The four solar projects in the latest Renewable Energy Independent Power Producer Procurement Programme allocation are expected to produce 890MW of electricity once completed.
A single R220m project was announced in the transport, storage and communication sector. DHL plans to demolish an existing warehouse in Johannesburg and replace it with a modern facility.
edward.west@nationalmg.co.za
THE NATIONAL