Cape Times 2026-02-26

The National Treasury has struck an optimistic tone on South Africa’s economic prospects, projecting that growth will gradually accelerate by 0.2 percentage points each year over the medium term, reaching 2% by 2028. The economy last expanded at roughly 2% or more in 2022, when gross domestic product (GDP) grew by about 2.1% following a strong rebound from the Covid-19 pandemic. Achieving similar growth levels again could begin to ease the country’s persistently high unemployment rate, which remains above 31%. Finance Minister Enoch Godongwana on Wednesday said domestic growth outlook is steadily improving while global growth had stabilised on the back of an unprecedented global trade environment characterised by persistent geopolitical tensions and shifting trade policies which are reshaping supply chains. Godongwana said improved macroeconomic stability, progress on reforms and…

The government intends spending R1 trillion on infrastructure over the medium term to address backlogs in social delivery and other major capital projects that have arisen from weak economic growth, inefficient public investment management and limited state capacity, policy uncertainty, supply-side constraints and waning investor confidence. National Treasury said Wednesday that fixed investment has not returned to pre-Covid-19 levels. "As government continues to shift the composition of spending towards growth-enhancing infrastructure, the focus is on improving value for money and the quality of spending. This includes addressing project delays, cost overruns and poor construction quality, which reflect weak planning and preparation, rigid and lengthy procurement processes, wasteful expenditure, weak contract management and disruptions linked to business forums," National Treasury said. Finance Minister Enoch Godongwana announced the government had also raised…

South Africa’s debt is projected to rise in nominal terms from R6.12 trillion in 2025/26 to R6.94trln in 2028/29 Finance Minister Enoch Godongwana has defended the government’s decision to increase borrowing this year despite assurances that public finances are stabilising. This comes as the 2026 National Budget Review on Wednesday revealed that South Africa’s debt is projected to rise in nominal terms from R6.12 trillion in 2025/26 to R6.94trln in 2028/29. With the gross borrowing requirement comprising the budget deficit, maturing debt and the R80bn Eskom debt-relief arrangement revised down to R563.4 billion from the R588.2bn projected in the 2025 Budget, the government is projected to borrow at an average of about R1.5bn per day. However, Godongwana said the debt-to-GDP ratio will remain elevated before gradually declining over the medium…

The National Treasury has reiterated that it is taking a multi-pronged approach to manage the growth in the government's wage bill, including a staggered early-retirement programme, auditing the number of employees on government's payroll, and professionalising the public service. This comes as salaries and benefits of employees accounts for nearly one-third of the government's consolidated expenditure. However, the government has said that the recently signed three-year wage agreement for 2025/26 to 2027/28 provides stability for public finances in the medium term. Tabling the 2026 National Budget Review on Wednesday in Parliament, Finance Minister Enoch Godongwana said the government was taking several steps to manage the wage bill. "Our fiscal strategy involves four key features: support economic growth by accelerating public investment, improve the efficiency of public spending, improve the composition…

Finance Minister Enoch Godongwana on Wednesday announced a decisive shift in the government’s approach to struggling municipalities, signalling a move from oversight to active structural intervention to address deepening governance, financial and service delivery failures at the local level. The intervention comes as South Africa grapples with a widespread water supply crisis, largely attributed to poor infrastructure maintenance, weak governance systems and ineffective credit control measures within municipalities. With local government elections looming later this year, stabilising municipalities is also seen as critical to curbing rising service delivery protests. While tabling the 2026 National Budget Review in Parliament on Wednesday, Godongwana said the National Treasury identified weak revenue collection, poor credit control, and a lack of financial discipline as the key factors in municipal financial instability. According to the Budget…

Taxpayers will breathe a sigh of relief from this year's National Budget because not only were there no personal tax increases announced, but the government scrapped plans it made last year to raise an additional R20 billion through tax this year. While smokers, drinkers, and drivers will pay the by-now usual inflation-linked duty increases, the windfalls on personal income tax and from the government spending R30,7bn to remove fiscal drag arise from better-than-expected tax revenues, improved revenue collection, slightly lower debt service costs, and because the government still expects to meet its fiscal targets over the medium term. Government's tax revenue for 2025/26 has been revised upwards by R21,3bn when compared with the 2025 Budget, Finance Minister Enoch Godongwana said in the Budget. The Budget deficit and primary surplus for…