Tshabalala calls for urgent overhaul of SAregulatory framework

Standard Bank Group CEO Sim Tshabalala has called for an urgent review of South Africa’s regulatory framework, which he says is limiting economic growth.

Tshabalala, who leads Africa’s largest and most profitable bank, in his annual letter to shareholders, published on Monday in the group’s 2025 annual report, made a case for regulatory reforms.

He said much of South Africa’s regulatory framework is no longer aligned with the country’s social needs and economic realities.

“A comprehensive review and modernisation of the regulatory system is urgently required, as the authorities recognise. This review should focus in particular on enhancing South Africa’s international competitiveness and on making it easier to start and run small and medium enterprises,” Tshabalala said.

“Poor regulation also creates opportunities for illegitimate and inefficient rent-seeking.

“In 2025, South Africa’s economy and society continued to face severe pressure from the corrupt appointment of ill-equipped contractors under the cover of regulation — for instance, in provincial health departments and in municipal electricity and water sectors — as widely reported in the media and investigated in several official inquiries.”

This combination of graft and incompetence severely slows growth and development, prevents real transformation and empowerment, and means that millions of South Africans regularly go without essential services, resulting in lost out put, social tension and heightened country risk - Sim Tshabalala, Standard Bank Group CEO

South African business leaders have increasingly spoken out against the country’s high levels of corruption and violent crime.

Testimony arising from the Madlanga commission has also exposed graft at the highest levels of the police, with criminal networks seemingly having freer in and protection by rogue elements in the police.

“This combination of graft and incompetence severely slows growth and development, prevents real transformation and empowerment, and means that millions of South Africans regularly go without essential services, resulting in lost output, social tension and heightened country risk,” Tshabalala said.

“Thankfully, as I write this, the national government has begun to focus much more intensely on this set of issues.”

One of the regulatory reforms Tshabalala has championed is Basel 3, whose critics have said it has constrained investment in infrastructure as it disproportionately puts high-risk weights on infrastructure investments.

Basel 3 was meant to make banks safer and prevent a replay of the 2008global financial crisis. Banks are required to hold a minimum amount of capital to remain solvent and protect their depositors’ investments. To determine how much capital to maintain, banks assign risk to every type of asset.

The National Treasury, in its 2026 Budget Review, indicated that it is working with the South African Reserve Bank’s Prudential Authority, alongside industry bodies, to explore whether the “current implementation of the Basel committee on banking supervision framework in South Africa affects the country’s ability to attract infrastructure investment”.

The Budget Review goes on to state that a review of this is expected by mid-year.