Finance Minister Enoch Godongwana presented the 2026 National Budget on 25 February 2026, announcing debt stabilisation at 78.9% of GDP and the withdrawal of proposed tax increases. The budget allocates R292.8 billion for social grants with increases for recipients and commits R1.07 trillion to infrastructure over the medium term. Reforms aim to enhance economic growth and public service efficiency amid a projected 1.6% growth for 2026.
On 25 February 2026, Finance Minister Enoch Godongwana delivered the 2026 Budget Speech in Parliament, Cape Town, marking a turning point in South Africa's public finances. He stated, 'For the first time in 17 years, debt will stabilise and it will continue to fall in the coming years.' The gross debt is projected to stabilise at 78.9% of GDP in 2025/26, declining to 76.5% by 2028/29, with the budget deficit narrowing to 4% of GDP in 2026/27.
Key measures include withdrawing the R20-billion tax increases proposed in the 2025 Budget due to higher-than-expected revenue collections. Personal income tax brackets and medical tax credits are adjusted for 3.4% inflation, providing relief after two years without adjustments. Social grants receive R292.8 billion in 2026/27, with the old age, disability, and care dependency grants rising by R80 to R2,400 from April 2026, and the child support grant increasing by R20 to R580. The Social Relief of Distress grant is extended until March 2027 at R370 monthly, with redesign details expected in the Medium Term Budget Policy Statement.
Infrastructure spending totals R1.07 trillion over the medium term, focusing on transport, water, and energy to support 1.6% growth in 2026, rising to 2% by 2028. Reforms under Operation Vulindlela address energy, logistics, and local government issues, including performance-linked grants for municipalities. Additional allocations include R883.8 million to the Office of the Chief Justice for independence from 1 April 2026 and R700 million for the Department of Communications and Digital Technologies to address SABC debt to Sentech.
Economists welcomed the debt-cutting focus, with Standard Bank's Elna Moolman noting encouragement from infrastructure allocations and fiscal prudence. The budget emphasises targeted savings of R12 billion to reallocate to priorities like the judiciary and border management, without broad austerity.
