The tools of growth: Why productive assets are South Africa's most underutilised economic lever
The tools of growth: Why productive assets are South Africa's most underutilised economic lever
South Africa's economy grew by 1.1% in 2025, reflecting modest progress, yet more than triple the pre-pandemic 2019 average growth rate of 0.3% and an improvement from 0.5% growth recorded in 2024. By sector, agriculture led the way, contributing the most among goods-producing sectors, with growth of 17.4% in 2025. Mining bounced back and gained momentum in the second half of 2025, a trend that has carried into the first quarter of 2026, underpinned by higher commodity prices. The transport sector also recorded modest growth, supported by improved rail freight activity, while road freight volumes remained marginally below 2024 levels.
In pockets of the country, smaller enterprises in retail, manufacturing and services are generating activity and employment in ways the headline GDP figures struggle to capture fully.
"South Africa's growth story is becoming more distributed," says Khantse Radebe, CEO of Asset Based Finance at WesBank. "Small and Medium Enterprises now account for an estimated 40% of GDP and employ between half to two-thirds of the workforce.
The engine beneath the economy
At the heart of what enables businesses to operate, compete and scale lies a category of investment that does not always receive the attention it deserves: productive assets. These are the revenue-generating tools of an economy, tractors and harvesters on farms; extraction equipment in mines; yellow metal machinery on construction sites; processing and packaging equipment in factories; and refrigeration units and shop fittings in the retail and service sectors.
The link between access to productive assets and economic participation is direct. For large corporates with established balance sheets and audit histories, acquiring these assets through traditional financing is relatively straightforward. For smaller enterprises, the path has historically been far more difficult. This is where asset-based finance plays a structural role, enabling businesses to preserve cash by funding productive, revenue-generating assets over the long term while retaining liquidity for day-to-day working capital needs.
A sector-by-sector opportunity
The breadth of that opportunity is visible across South Africa's productive economy. The cumulative effect of thousands of businesses gaining access to commercial ovens, refrigeration units or delivery vehicles is substantial, both for employment creation and for broader economic circulation.
In Agriculture, the sector's strong performance in 2025 translated directly into demand for equipment: tractor sales rose by 21.3% year-on-year in the first half of 2025, while combine harvester sales grew by 29.8% over the same period. Agricultural exports reached US$15.13 billion in 2025, reflecting a supportive external environment. The two-year zero-tariff window on South African agricultural exports to China provides an additional growth opportunity.
Construction tells a more challenging story. The sector has now recorded nine consecutive years of decline in gross value-added and continues to face persistent structural headwinds. Yet this is precisely where infrastructure investment becomes catalytic. The 2026 Budget allocates R21.9 billion through the Budget Facility for Infrastructure, targeting freight corridor restoration and rail capacity, alongside continued investment in the national road network. Activity at this scale creates sustained demand for construction equipment and for the financing mechanisms that put it to work.
Mining, which contributes 4.4% to GDP and remains central to South Africa's export revenues, is a capital-intensive sector in which productive assets are not optional. Extraction equipment, processing machinery and bulk transport infrastructure are the baseline requirements for participation. For contract mining operators and junior miners seeking to enter or expand, access to asset finance is a competitive advantage.
The transport sector remains critical for the South African economy, accounting for around 5% of GDP. Activities in this sector span rail transport, land transport, water transport and air transport. Productive assets in rail transport include locomotive and freight wagons as well as rail infrastructure, while road freight and logistics depend on heavy-duty trucks and trailers, delivery vans and light commercial vehicles. These assets are long-lived and capital-intensive, and directly determine productivity, throughput and cost efficiency across the transport value chain.
Mechanisation and competitiveness
Investing in mechanisation allows businesses to meaningfully participate in the economy and competitive value chains.
A farmer that engages mechanisation and precision farming creates resilience and predictable harvests, ultimately culminating into more sustainable cashflows. A manufacturer with modern processing equipment can compete for contracts that would otherwise be inaccessible or uncompetitive."
This extends to climate favourable forms of mechanisation, such as electric solar-powered equipment, electric forklifts, and other lower-emission technologies, which are emerging as alternative responses to both cost pressures, climate sensitive down-stream markets and broader environmental considerations.
Closing the access gap
The challenge of SME financing in South Africa is well-documented. Historically, smaller businesses have been underserved by traditional credit frameworks that rely heavily on audited financial statements and lengthy processes.
To address this, we have invested in building strong data-driven and behavioural lending models that draw on a broader set of financial signals, cash flow patterns, transaction histories and sector performance. These insights enable us to develop a more accurate picture of our customers, informing how we serve them and allowing us to provide the right support at every stage of their growth journey.
By deepening our partnerships with development finance institutions, we can extend the reach of private financing further into underserved segments.
Equally important is the structuring of finance itself. Aligning loan terms to the productive lifespan of an asset, and calibrating repayments to a business's cash flow cycle, is not merely a technical consideration it is the difference between a loan that enables growth and one that undermines it.
"Asset Based finance is not simply a product," says Radebe. "At its best, it is an advisory relationship. We are often introducing smaller businesses to formal financial leverage for the first time. Getting the structure right from the outset, matching the finance term to the asset’s useful life and managing cash flow impact is part of what we do."
The path ahead
South Africa's logistics infrastructure illustrates the interconnected nature of these challenges. Rail freight volumes grew by 5.5% in 2024/25, reversing years of decline, and government's R76.6 billion investment commitment to the logistics value chain over the coming three years signals a serious intent to restore freight rail as a viable artery for productive sectors. As rail capacity recovers, the dynamics for road transport, mining operators and agricultural exporters will shift and asset finance will be a catalyst.
The businesses and sectors capable of driving South Africa's next growth chapter are already active. The National Development Plan's target of SMEs contributing 90% of 11 million new jobs by 2030 is ambitious but it is grounded in a realistic assessment of where growth must come from. Meeting that target requires capital, and capital requires access to finance.
"The productive capacity of this economy will not be unlocked by large institutions alone," says Radebe.” It will be unlocked business by business, asset by asset, in every sector where someone has the ambition to grow and the right financing structure to do it. Our role has been to make access to finance simpler, while reinforcing asset-based finance as a key lever for stimulating economic growth.
*Information provided by the publicist.
If your brand or PR Agency sends out multiple advertorials (Media/ Press Releases) in a month, and would like all the advertorials to be Fully featured on iloveza.com at an Extremely Reasonable price,
AND/OR to Advertise your brand, email howzit@iloveza.com
