KZN Rebounds from Unrest and Pandemic, Targets Faster Growth

KwaZulu-Natal is steadily rebuilding its economy after the twin shocks of the July 2021 unrest and the COVID-19 pandemic, with measurable gains in growth, investment and job creation, Premier Thamsanqa Ntuli said during his State of the Province Address (SOPA).

Describing the period as one of "profound disruption", Ntuli said the unrest and pandemic led to loss of life, widespread infrastructure damage, business closures and a sharp decline in investor confidence.

"Out of this hardship, we made a deliberate choice not merely to rebuild what was lost, but to reimagine and reconstruct our provincial economy on a more inclusive, resilient and sustainable foundation," he said.

Signs of Economic Recovery

Under the Government of Provincial Unity, the provincial economy grew by 1.8% in 2025 — a moderate but notable improvement from the subdued post-pandemic period and slightly above the national growth expectation.

Growth is forecast to reach 2.1% in 2026, supported by improved energy supply and gradual recovery in rail and port infrastructure.

"These improvements are critical to restoring investor confidence and unlocking the full productive capacity of our province," Ntuli said.

Between mid-2025 quarters, KwaZulu-Natal recorded a net gain of approximately 54,000 new jobs, boosting household incomes and consumer spending.

R100 Billion in Investment Pledges

The Premier revealed that by late 2025, the province had secured more than R100 billion in investment pledges from domestic and international investors.

The pledged projects are expected to generate over 100,000 jobs and stimulate activity in key sectors including manufacturing, logistics, energy, agriculture and tourism.

Tourism, a major economic pillar, delivered strong performance in 2025, with the festive season alone contributing an estimated R13 billion to provincial GDP.

Investor engagement has intensified, with renewed interest reflected in expanding project pipelines and sector-specific opportunities.

Structural Constraints Persist

Despite progress, Ntuli acknowledged ongoing structural challenges, including:

• Historical electricity disruptions

• Freight inefficiencies

• Rail and port bottlenecks

• Slow national economic growth

These factors continue to constrain higher growth potential.

R168 Billion Needed to Tackle Unemployment

The province faces a significant employment challenge, with unemployment currently at 30.8%.

To reduce this to 20%, KwaZulu-Natal requires approximately 461,000 additional jobs — a target that would require around R168 billion in investment.

Economists estimate that sustained GDP growth of 5% or higher is necessary to meaningfully reduce unemployment, given the province's relatively low employment elasticity, where a 1% GDP increase yields 0.5% or less employment growth.

With projected growth peaking at 2.1%, current expansion rates may absorb new entrants into the labour market but will not eliminate the backlog of unemployed residents.

Infrastructure-Led Growth Strategy

To accelerate progress, the province is pursuing an infrastructure-led and industry-driven growth path under the KwaZulu-Natal Inclusive Growth Strategy.

Key interventions include:

• Scaling up informal sector development

• Enhancing cross-border trade

• Smart infrastructure investments such as public Wi-Fi

• Upgrading township and rural economic amenities

The revival of the King Shaka International Public Link Solution aims to strengthen connectivity between Durban, Pietermaritzburg, Richards Bay and Margate, reinforcing key economic corridors.

KwaZulu-Natal has also engaged the National Department of Trade, Industry and Competition (dtic) to secure an industrial stimulus package for industrial parks and Special Economic Zones.

Trade and Investment KwaZulu-Natal has been tasked with facilitating SMME participation in cross-border trade, particularly leveraging opportunities under the African Continental Free Trade Area.

Ntuli concluded that while recovery is underway, sustained collaboration between government, business and labour will be essential to place KwaZulu-Natal on a higher and more inclusive growth trajectory.