Godongwana outlines path to fiscal stability in Medium-Term Budget Policy Statement
Finance Minister Enoch Godongwana Outlines Path to Fiscal Stability in Medium-Term Budget Policy Statement
Image: GCIS
Finance Minister Enoch Godongwana delivered a focused and strategic Medium-Term Budget Policy Statement (MTBPS) that outlined key priorities aimed at steering South Africa towards fiscal stability and sustained economic growth.
Central to his address on Wednesday in parliament was the government’s commitment to reducing public debt from 4.5% of GDP in 2025/26 to 2.7% by 2028/29, underscoring debt sustainability as a cornerstone for restoring confidence in the country’s financial future.
“Every time this policy statement is delivered, there is reason to be optimistic about the future of our country,” Godongwana said.
He emphasised the government’s resolve to grow the economy, strengthen public finances, and improve the lives of all South Africans.
A significant focus of the MTBPS is the intensified crackdown on illicit trade, particularly the R40 billion in excise revenue the government loses annually to the cigarette black market alone.
The minister pledged more decisive, coordinated law enforcement action to combat illegal activities not only in tobacco but also in alcohol, fuel, and precious metals, which have undermined legitimate businesses and public health.
Godongwana also highlighted significant progress in removing South Africa from the Financial Action Task Force’s grey list.
Godongwana said that this milestone boosts investor confidence and demonstrates enhanced collaboration across government, law enforcement agencies, and the private sector to combat money laundering and terrorism financing.
Looking ahead, infrastructure investment was identified as a critical driver of growth, with the government shifting spending away from consumption toward capital projects, expected to grow at an annual rate of 7.5% over the medium term.
Reforms to public-private partnership frameworks and regulatory processes aim to unlock private-sector participation and accelerate delivery in the energy, transport, and water management sectors.
In addition to disaster relief funding for areas affected by recent floods, the MTBPS introduces innovative financing tools, including a new infrastructure bond targeting at least R15 billion to mobilise cheaper capital for key projects.
Minister Godongwana reaffirmed South Africa’s broader role on the global stage, citing the country’s upcoming presidency of the African G20 and recent successful engagements with G20 finance ministers and central bankers to build consensus on advancing the continent’s development.
Despite a challenging global economic outlook, with growth projected to slow to 3.2% in 2025, the minister underscored the importance of regional integration through the African Continental Free Trade Agreement as a vital opportunity to unlock new markets and partnerships within the continent.
Addressing transparency and accountability, the government is exploring a “fiscal anchor” approach to enhance parliamentary oversight, fiscal risk reporting, and strengthen the management of public finances.
Godongwana called for national unity and resolve among South Africans.
“Our optimism is rooted in the progress we’ve made and our determination to keep the promises we have set out.”
He urged South Africans to work together “in a spirit of solidarity and mutual respect” to realise collective prosperity.
As South Africa grapples with global uncertainties and internal structural challenges, the MTBPS lays out a pragmatic roadmap to balance fiscal discipline, crime reduction, and strategic investment - to revive growth and build a more inclusive economy.
thabo.makwakwa@inl.co.za
IOL Politics