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German companies operating in South Africa are committed to the country, with cautious optimism driven by reform signals and political stabilisation under the government of national unity.However, policy and regulatory uncertainty continues to cast a long shadow, emerging as the most cited constraints on business activity in Africa, followed by concerns around broad-based BEE compliance requirements.South Africa remains Germany’s largest trading partner on the continent, accounting for around one third of the European country’s total trade with Africa. The net stock of German direct and indirect investment in South Africa reached €8.4bn in 2024.Presenting the findings of the 2026 German-Southern African Business Outlook at a media briefing, AHK Southern Africa CEO Maximilian Butek said the survey exists precisely to give weight to what the business community experiences on the ground. Almost all respondents (92%) are members of AHK Southern Africa, primarily comprised of subsidiaries of German corporations and German companies with activities in the Southern Africa region. The chamber was founded in 1952 and supports about 600 member companies.Respondents surveyed for the report included companies in manufacturing and industrial machinery; energy, including renewable energy; consulting and professional services; mining and mineral resources; automotive; transport logistics and supply chains; chemicals; healthcare; and pharmaceuticals.Others were in the ICT and digital services, construction and infrastructure, financial and insurance services, agriculture and food processing, consumer goods and retail, as well as tourism.The survey, conducted among 75 companies between January and February, found that 61% anticipate revenue growth in South Africa over the next 12 months, while 33% expect revenues to remain broadly stable. South Africa remains the primary operational base for virtually all respondents, with 99% of participating companies operating there. Beyond South Africa, Namibia is the next most targeted market at 47%, followed by Zimbabwe at 32% and Zambia and Botswana both at 28%.“Companies are responding positively to the reform signals from the government and the political stabilisation, but this optimism is closely tied to expectations around delivery on energy, logistics, governance and policy certainty,” Butek said. Policy and regulatory uncertainty was cited by 51% of respondents as a top constraint, followed by broad-based BEE requirements at 36%. Operational challenges including skills shortages, high-cost pressures and logistics constraints each came in at around 27%, while crime and security concerns were flagged by 24% of respondents.Plans over the next three years remain conservative, with 49% of companies in South Africa focusing on maintenance and replacement investments and 38% reporting no planned investments at all. Where investment is planned, it leans toward market expansion, skills development and digitalisation rather than large-scale capital commitments.“Consistent policy certainty, reform delivery and infrastructure performance are non-negotiables that directly shape investment decisions ... German companies remain engaged and optimistic, but the operating environment is becoming more complex,” Butek said.
