South Africa's Fiscal Fortunes Shift: A New Era of Growth and Stability?

Finance Minister Enoch Godongwana.

By Mpho Dube, Editor-in-Chief of The Azanian

Finance Minister Enoch Godongwana tabled the Medium-Term Budget Policy Statement (MTBPS) today, outlining the government's fiscal strategy and economic outlook.

According to Godongwana, the budget deficit is expected to narrow to 2.7% of GDP by 2028/29, a level last achieved in 2008/09. This development has been hailed as a significant improvement in the country's fiscal outlook.

The 2025 MTBPS has received mostly positive reactions from political parties. The Democratic Alliance (DA) has welcomed the MTBPS, with DA leader John Steenhuisen describing it as the right direction for the country's economic growth. "If we have the discipline now to stick to the announcements today, we are going to see the South African economy growing. More South Africans are getting into jobs and reducing the costs of living for our people in South Africa, and I think that is all good for us."

ActionSA Parliamentary leader Athol Trollip also welcomed the MTBPS, highlighting the focus on revenue collection. "Sub-Saharan African countries and developing countries are performing much better than we are. This has everything to do with the ANC government who just can't see economic growth. The minister spoke about revenue, and I think revenue is really important. We were the party that championed more funding for SARS. SARS has shown that they can collect more, not just from the man on the streets who pays tax but from the recent economy."

The African Christian Democratic Party (ACDP) is also pleased with the MTBPS, believing that the ship is moving in the right direction. "The ACDP believes that the ship is moving in the right direction, and this is the first step in that direction, although our economic growth is still low. Although our debt is still high, and debt service costs are still high, there are positive green shoots of economic growth, and that is necessary for job creation and poverty alleviation and increased revenue."

In a bid to promote fiscal discipline and accountability, the government has announced plans to save R6.7 billion by shutting down or scaling back underperforming and low-priority programs. The initiative, known as the Targeted and Responsible Savings (TARS) program, aims to eliminate waste and inefficiency in government and ensure that tax money is spent responsibly.

"Honourable Members, eliminating waste and inefficiency in government is non-negotiable if we are to maintain public trust that tax money is spent responsibly," Godongwana said.

More than half of the identified savings will come from tackling fraud and duplication in the social grants system, including finding individuals who are "double-dipping and defrauding the system."

The government has also introduced a program assessment matrix, which will be used to systematically review all public programs and ensure that they align with legislation and policy, avoid duplication, deliver measurable results, and use resources efficiently.

As the country navigates its fiscal journey, it is essential to monitor the implementation of the MTBPS and assess its impact on the economy. The government's commitment to transparency and accountability will be critical in building trust and ensuring that the benefits of fiscal stability are shared by all.