By Comfort Matoti
South Africa stands at a defining crossroads. For years, the country has wrestled with the triple challenges of unemployment, inequality and poverty, a triad that continues to erode its social cohesion and economic potential. The time has come for a bold, internal reckoning: we must urgently revive Domestic Direct Investment (DDI) as a principal lever for inclusive growth and sustainable development. While Foreign Direct Investment (FDI) remains important, it is domestic investment the capital, commitment and confidence of South African companies, that will ultimately transform our economy from within.
South Africa is not short of successful, scalable businesses. Many companies are generating healthy profits, maintaining stable balance sheets, and navigating complex markets with competence. But what remains disturbingly lacking is a national culture of reinvestment, where success is not hoarded, but rather redeployed to expand economic activity, create employment, and build industries aligned with the future. In a time where emerging technologies, green economies, digital transformation, and regional trade integration are reshaping global trajectories, local businesses must not sit idle. They must be motivated, even compelled, to diversify their investments, build new capacities, and strategically expand into areas that will define the next generation of prosperity.
To achieve this, several structural and policy interventions are required. First, fiscal incentives must be reimagined. The government should offer substantial tax breaks or deferred tax payments for companies that reinvest a portion of their profits into new ventures, industrial expansion, skills development, or township and rural enterprises. Investment allowances targeted toward high-growth sectors, like renewable energy, agri-processing, tech infrastructure, and manufacturing, would go a long way in stimulating scalable domestic capital formation.
Second, the creation of a Domestic Investment Compact, a collaborative framework between government, business, and labour, can signal a shared national commitment. This compact could set targets for DDI growth, outline strategic sectors for investment, and create accountability mechanisms. It would also serve as a platform to resolve the trust deficit between public and private sectors, a critical barrier to long-term planning and coordination.
Third, we must leverage South Africa’s development finance institutions (DFIs), such as the Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA), to de-risk private investment. By co-financing local projects or offering guarantees for small and medium-sized enterprises (SMEs), these institutions can help catalyse the kind of grassroots economic participation that underpins job creation. A blended finance model, where public capital is used to crowd in private capital, must become the norm.
Moreover, South African companies should be encouraged to invest in regional integration and infrastructure to tap into the African Continental Free Trade Area (AfCFTA). Investing in logistics, cross-border digital platforms, and intra-African manufacturing value chains will not only open new markets but also increase the competitiveness of South African products and services on the continent. Such outward domestic investment, while rooted at home, enables scale, innovation and long-term returns.
In addition, the country must overhaul its skills development strategy. Businesses reinvesting in South Africa must be incentivised to partner with Technical and Vocational Education and Training (TVET) colleges, universities, and innovation hubs to produce work-ready graduates. Domestic reinvestment into skills is not a cost, it is an asset multiplier. Every new factory, service hub or R&D lab should be built with a deliberate plan to absorb young talent into the workforce.
It is also time to tackle the bottlenecks that deter reinvestment: unreliable electricity, inefficient ports, red tape, and corruption. Domestic investors are not immune to the same structural constraints that frustrate international ones. Fixing the fundamentals, from governance to infrastructure, is a prerequisite to igniting local confidence.
Crucially, the South African public must also hold business accountable. We must celebrate companies that build the economy, create jobs, and drive innovation, not only those that post record profits. Business success should be measured by its contribution to national development, not just shareholder returns. In this light, a public registry that tracks and ranks companies by their DDI contributions and job creation metrics could spur a race to the top.
South Africa’s challenges are immense, but so too is its untapped potential. By placing Domestic Direct Investment at the heart of our economic strategy, we shift from dependency to agency. We draw on the talents, capital and aspirations of South Africans to reimagine our future. The call is not for charity, but fora new business ethos: one where scalable profit is married to scalable purpose, and where national progress is not a by-product, but a bottom line.
The future is domestic. Let us invest in it, together, boldly, and without delay.
Comfort Matoti (Gauteng Provincial Chairperson of the Black Management Forum Young Professionals and African Gospel Church Member).
