It’s that time of year when columnists make profoundly deep and meaningful predictions after gazing into the crystal ball. But first, a radical detour. Can people stop serving San Pellegrino water in restaurants in South Africa? It drives me mad.

When questioned, the “waitrons” apologise and say local patrons enjoy the foreign brand. Sometimes they will offer a local alternative, but not always.

The madness of importing water from the other side of the world seems lost on people. There is surely a gap in the market here for a “fashionable” bottle of expensive sparkling stuff.

Similarly, it drives me spare when on safari the guide whips out the most basic and cheap UK gin for a sundowner, rather than one of the far superior local varieties — again because locals apparently prefer a foreign label.

If only the localisation and industrialisation debates in South Africa were this obvious. Which brings us to the outlook for 2026.

Politics

How many times in the new year will the ANC double down on its chosen industrial policy interventions, particularly in ferrochrome and smelting? The issue is likely to become a major theme of 2026 — especially in the run-up to the local government elections.

Some businesses are expected to cross-subsidise a relatively small number of jobs (but importantly — as Meridian has shown — cross-subsidies that have to grow over time). Why? Why not more labour-intensive sectors such as business process outsourcing receiving electricity subsidies? Or textiles? Even that is more labour intensive. Or agriculture?

The lack of a thought-through set of trade-offs and joined-up policy will eventually come home to roost in 2026 as regulators, businesses and the electorate push back — either to end the policy if it starts or, as we are seeing already from negotiations between the smelters and Eskom, stop it from just getting off the ground.

Eskom’s CEO has already come out against the idea — precisely because to smelter workers and the industry itself and its political interests, the narrative will be “the government is rescuing you”, but to everyone else in the country it will be, “Eskom is pushing up prices even further and faster”.

Growth

Another key question for 2026 is how much macroeconomic policy reform can boost growth. The yield curve has fallen meaningfully in 2025, and businesses and individuals need to get used to the optics and opportunities of borrowing at order-of-magnitude lower interest rates.

Much of this is tracking the lower inflation target and lower expected future inflation (itself a positive), but 2026 is set to be the year in which we are likely to see real rates across the yield curve fall, which should in theory have a larger impact on growth.

Are businesses and individuals ready for this? Ready for considering lower threshold rates of return on investments for projects (if your comparator rate of return — the 10-year bond, say, is so much lower)? Do boards know to discuss this and plan off the back of it?

This is what the Treasury and Reserve Bank should come to the table about to explain more clearly to economic agents in 2026. With future upgrades likely during the coming year and debt levels having peaked and starting to very slowly fall, and more expenditure cuts and a fiscal rule being published, the heavy lifting of macro policy may finally put to bed the leftists who wanted a very different paradigm — and actually lead to an upside surprise in growth no-one can quite forecast or pencil in yet.

The other upside surprise booster for growth might well be the ANC’s fall in Johannesburg. Sure, the elections are only likely to be at the very end of 2026, but it has amused and concerned me how much corporate investment sentiment of companies and banks is suppressed by the disaster that has been the city’s governance — precisely because most key decision-makers in the country live there. A change there (probably post-elections rather than before) should cause some shift in sentiment and growth for the entire country.

US importance

Another question for 2026 is whether the US will stop mattering. Trade volumes have held up remarkably well in the first three months of post-tariff bilateral trade data available to us. But there has also been huge successes in agriculture, especially fruit exporters tapping new Asian demand. Markets have also adjusted to eye-rolling in response to US pronouncements on SA (rather than the freak outsat the start of 2025).

This is not to ignore that the cutting off of Pepfar and other health and research funding, as well as restricted access to such a large market, is clearly not great. However, as a driver of the narrative and growth, the US might well be lower in the pecking order for the next year as people get on and work around the US.

Structural reform

The big question hanging over 2026 is if the next big steps on structural reform can be taken. This means deep political decisions and political capital deployment to establish the primacy of existing regulators such as the National Energy Regulator of SA for electricity reforms and new regulators such as the Transport Economic Regulator for logistics reforms.

Equally, the Treasury’s leadership in complex unbundling and creditor relations regarding Eskom and Transnet will become increasingly important (the Treasury is the belle of the ball on this front, and 2026 will be the key year). There will also have to be much work on the detail of reforms in areas such as housing and home affairs policies, including whether private sector participation can find the right line between policy interests, bankability and commercial viability in many areas across network industries.

All of this will come together in the context of a “meh” growth forecast of about 1.6% for 2026, though there could be some upside skew, and even a surprise to the upside. Otherwise, it will be a very long year trying to maintain the shift in mood that started over the past month. We will need a lot of that local gin.

• Peter Attard Montalto leads on political economy, markets and the just energy transition at Krutham, a SA research-led consulting company.

This article first appeared in Business Day.