For the South Africans whose retirement savings sit in pension funds, the money set aside over decades of work is not an abstraction. It is the country’s single largest pool of long-term capital. And according to new research from Old Mutual Corporate, how that money is used may matter as much as how much of it there is.
The research, Old Mutual Corporate: Retirement Saving, Capital Formation and Economic Growth in South Africa (Sept 2026), was produced through a partnership with Professor Adrian Saville of GIBS and Boundless World. It was presented at the third Old Mutual Thought Leaders Forum, held at the Marriott Hotel Melrose Arch in Johannesburg, where Old Mutual Chief Executive Officer Jurie Strydom framed its central implication: raising investment alone will not lift South Africa’s growth rate unless the country also improves how effectively capital is converted into productive economic activity.
The numbers behind that argument are stark. South Africa invested an average of about 14% of GDP over the five years to 2025, compared with roughly 22% for the average economy. Saville is blunt about what the international evidence shows. “If you do not have elevated saving and investment, you will not get economic growth. Full stop.” Across the countries studied, he says, there was not a single example of an economy moving from poor to prosperous without materially higher saving and investment.
Yet quantity is only half of the equation. In his presentation, Saville reduced the challenge to two questions: how much a country invests, and how well it invests. On the second measure, South Africa has substantial ground to recover. The research estimates that the country currently needs about R14.50 of investment to generate one additional rand of output, compared with roughly R3 to R5 in the most capital-efficient, fast-growing economies in the study.
The modelling makes the stakes clear. If South Africa simply increases investment from around 14% of GDP towards the 30% achieved by high-saving economies, while leaving capital efficiency unchanged, modelled growth rises from roughly 1% to about 2%. Improving capital efficiency alone gets growth closer to 3%. When the two are combined, the model produces a substantially stronger outcome, including a 6% annual growth scenario.
“A larger pool of capital is necessary, but it is not sufficient,” Saville argues. “If that money simply moves into existing assets without adding productive capacity, we have not solved the growth problem. The test is whether investment creates the infrastructure, businesses and productive assets that allow the economy to do more.” He puts it more simply still: “The investment needs to have impact.”
For savers, there is a further constraint that shapes what their money can do. About 93% of South Africa’s fixed investment is financed from domestic saving, which makes the country’s own capital base a hard limit on how much it can sustainably invest. The funds built up by working South Africans are, in practice, the foundation the economy must grow from.
Meanwhile, Strydom acknowledged progress being made through the Presidency to strengthen the country’s infrastructure pipeline, including through Infrastructure South Africa and efforts to improve how projects are planned, prepared, financed and delivered. “This is important progress. The next step is to convert more of that pipeline into projects that are commercially credible and investable. South Africa has substantial pools of long-term capital, but that capital can only be deployed where projects can stand on their own merits.”
The research points to electricity transmission, water systems, rail corridors and ports as examples of long-duration assets that can improve economic capacity and productivity, and notes that such assets can be well matched to long-term institutional investors, including retirement funds. But the need for infrastructure does not, on its own, make a project investable. Projects still need credible economics, appropriate risk allocation, strong governance and the ability to generate returns that justify committing capital over long periods.
Strydom was firm that the fiduciary responsibility of investors must remain central, precisely because that capital belongs to people. “Retirement capital belongs to members. The standard cannot be lowered because the country needs infrastructure. The opportunity is to create projects that can compete for that capital on their own merits.”
Too few projects currently reach the point where long-term investors can commit to them. Better project preparation, clearer risk allocation and stronger governance are therefore as important to the growth equation as the availability of capital itself.
What comes next, Strydom said, is improving the quality and depth of the investment pipeline available to long-term investors. “Capital follows opportunity. The public and private sectors need to create projects that are properly prepared, governed and commercially credible. Investors then have a responsibility to assess those opportunities rigorously and back them where the case holds. If we can increase the capital available and improve what that capital finances, we give South Africa a much stronger foundation for growth,” he concludes. Further coverage of the research and the forum can be found at https://cbn.co.za/industry-news/business-advisory-financial-services-news/sa-needs-more-capital-and-better-places-to-put-it/
For the households whose pensions underpin this debate, the message is twofold: the country needs more capital, and it needs that capital, much of it their own, to be placed where it genuinely builds.