Godongwana Tables 2026 Budget in Parliament
South African Finance Minister Enoch Godongwana delivered the highly anticipated 2026 Budget Speech on Wednesday, February 25, 2026, at 2 PM (14:00) from the Parliament Dome in Cape Town. The address followed President Cyril Ramaphosa's State of the Nation Address (SONA) on February 12, 2026, which set the government's policy priorities for the year. Markets and citizens alike were awaiting clarity on the nation's fiscal health, economic reforms, and strategies for sustainable growth.
Fiscal Consolidation and Debt Stabilization at Core
A central theme of Minister Godongwana's speech was the government's commitment to fiscal consolidation and debt stabilization. The consolidated budget deficit is projected to narrow to 4.5 percent of GDP for the 2025/26 financial year, an improvement from the 4.8 percent estimated in 2025. This deficit is expected to further decrease to 4 percent in 2026/27 and 3.1 percent by 2028/29. Gross debt is anticipated to stabilize at 78.9 percent of GDP in 2025/26, subsequently declining to 77.3 percent in 2026/27 and 76.5 percent by 2028/29. This marks a significant turning point, with debt service costs projected to decrease from 21.3 percent of revenue in 2025/26 to 20.2 percent in 2028/29.
Economic Growth Projections and Reforms
The Minister outlined an improving economic outlook for South Africa. Real economic growth is projected at 1.6 percent in 2026, an increase from the 1.4 percent estimated in 2025. Over the medium term, growth is expected to average 1.8 percent, reaching 2 percent by 2028. Despite these positive projections, challenges such as persistent logistics bottlenecks, weak public infrastructure, and the recent foot-and-mouth disease outbreak continue to pose risks to economic activity.
The government's reform agenda, built on principles of stabilizing debt, investing in infrastructure, and improving spending efficiency, has yielded tangible results. Notable achievements include South Africa's removal from the FATF grey list, securing its first credit rating upgrade in 16 years, and eased borrowing costs. Furthermore, the government plans to propose a 'principles-led' fiscal anchor later in the year to embed fiscal sustainability.
Key Allocations and Social Support
The 2026 Budget detailed several key allocations and adjustments aimed at supporting citizens and stimulating the economy:
- The tax-free annual investment limit will increase from R36,000 to R46,000 per year.
- The limit for retirement fund deductions will be raised from R350,000 to R430,000.
- Social grants will see increases:
- Old age, disability, and care dependency grants will rise by R80 to R2,400.
- The war veterans grant will also increase by R80 to R2,420.
- The foster care grant will go up to R1,290 in April and R1,300 in October.
- The child support grant and grant-in-aid will increase by R20 to R580.
- For the 2026/27 fiscal year, nationally raised revenue will be allocated as follows: 48.9 percent to national government, 41.7 percent to provinces, and 9.4 percent to local government.
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