Operation Phumelela Welcomes MTBPS, Calls for Reforms to Bring Financial Services Back Onshore

POSTED ON: November 12, 2025 IN Press

National Treasury’s fiscal improvements create ideal conditions to recapture financial activity currently managed in offshore centres

The Medium-Term Budget Policy Statement showed National Treasury is on track to stabilising the country’s finances, which will support investor confidence by demonstrating that financial risks are being well managed. The revenue and expenditure outlook confirms that debt service costs (as a proportion of GDP) will peak in the 2025/26 period and then start to reduce, improving the risk profile of government debt and reducing its cost.

This strengthens investor confidence and supports economic growth. It was positive to see National Treasury’s forecasts of GDP growth rising to 2% by 2028, a figure we believe could be exceeded if the right reforms are made.

These improvements significantly enhance South Africa’s position in the global financial system as a credible counterparty. The Operation Phumelela steering committee believes the improvements in government finances provide good grounds for improvements in sovereign credit ratings which will further boost international confidence. Together with South Africa’s exit from the grey list of the Financial Action Task Force, there is clear and positive momentum in South Africa’s global reputation.

Building on Existing Momentum

This progress builds on strong government support for financial sector reform, demonstrated at Operation Phumelela’s June Lekgotla where Deputy Finance Minister David Masondo endorsed coordinated reforms to enhance competitiveness.

The improved fiscal position provides clear opportunities for our financial sector to boost export revenue generation by providing financial services to the rest of Africa and further afield. This would create employment and increase tax revenue within South Africa’s borders while attracting back financial services activities that have been lost as competitiveness has waned over recent years.

The financial sector makes up a quarter of GDP and represents a clear national asset. However, other markets now provide compelling alternatives to global investors as domiciles for their investments. To compete effectively, South Africa must act decisively.

A Synthetic Financial Centre Solution

To capture these opportunities, Operation Phumelela has proposed the implementation of a coordinated “Synthetic Financial Centre” approach, reforms that would enable South Africa to offer the benefits of major financial centres while maintaining appropriate regulatory oversight. This means bringing onshore the financial activities currently conducted in offshore jurisdictions.

Operation Phumelela’s task teams have researched and proposed specific reforms that would boost financial services exports and attract assets of both South Africans and international investors to be managed within the country:

Enabling listing of debt and equity instruments in hard currencies: This would reduce exchange rate risk for South African issuers and provide foreign exposure for South African savers, while keeping activity within South African financial markets and generating local employment and tax revenue.
Enabling efficient management of foreign asset portfolios from within South Africa: This would create jobs in asset management, research, and supporting services while generating substantial tax revenue from management fees currently earned offshore.

“These reforms would give South Africa’s banks and investment managers a fighting chance to attract back the substantial South African savings currently managed in offshore financial centres, estimated in the trillions of rands,” says Leila Fourie, chair of Operation Phumelela and CEO of the JSE. “It would also enable us to become competitive in managing global investment flows, leveraging our strengths in sustainable finance and deep African market knowledge.”

“The MTBPS will support the green shoots we are seeing in the economy,” says Daniel Mminele, Operation Phumelela steering committee member and chair of Nedbank, “but we need to accelerate this growth trajectory now to maximize the benefits. These targeted reforms would catalyze rapid expansion in financial services exports.”

Alignment with National Strategy

The proposed Operation Phumelela reforms directly support the National Development Plan’s vision of creating a regional financial hub in South Africa and the often-stated strategy of making South Africa a gateway to Africa. They would also strengthen regional linkages to support our companies in trading across the continent, taking full advantage of the African Continental Free Trade Agreement.

Continuing Collaborative Engagement

Operation Phumelela remains committed to working collaboratively with National Treasury and regulatory stakeholders to explore opportunities for enhancing financial sector competitiveness. We appreciate the constructive engagement to date and look forward to continued dialogue on how these reforms might contribute to South Africa’s economic growth objectives. The improving fiscal environment presents an opportune moment for all stakeholders to work together toward our shared goal of a thriving, globally competitive financial sector.

About Operation Phumelela

Operation Phumelela is South Africa’s Financial Sector Competitiveness Taskforce, established to enhance the country’s position as a leading international financial centre and gateway for investment into Africa. The task force has been convened by industry leaders to work with government and regulators to implement structural reforms that improve competitiveness, deepen capital markets and support economic growth through enhanced financial sector capabilities. More information is available at its website, www.operationphumelela.org.za.

Operation Phumelela takes its name from the Zulu word meaning “to succeed” or “to achieve,” reflecting the initiative’s commitment to transforming South Africa’s financial sector competitiveness.

For more information or to arrange interviews, please contact:

For Dr Leila Fourie, Pheliswa Mayekiso, email pheliswam@jse.co.za or mobile +27 84 486 0502.
For Dr Stuart Theobald, Jennifer Kann, email jkann@krutham.com or mobile +27 83 455 3289

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