President hails budget as recovery turning point

President Cyril Ramaphosa says the 2026 Budget, tabled by Finance Minister Enoch Godongwana last week, will accelerate the momentum of inclusive growth, create jobs, and tackle poverty. Writing in his weekly newsletter, the President described the budget as a developmental choice aimed at stabilising and transforming the economy after a prolonged period of uncertainty.

Ramaphosa said improvements in public finances, a narrowing budget deficit, and recent credit rating upgrades signal the beginning of a sustainable economic recovery. He said these factors have improved market confidence, allowing the government to invest in growth and poverty relief without compromising fiscal sustainability.

Social wage and human capital

The social wage now accounts for over 60% of government spending after interest payments. The President said this year’s allocation will provide healthcare services to 84% of the population and support 26.5 million social grant beneficiaries. Additionally, over 11 million indigent households will receive free basic services, while 13.6 million learners will be supported in schools.

In the basic education sector, funds have been set aside to employ more educators. The President said additional funds were also allocated to the early childhood development grant to reach 300,000 more children and to align the National School Nutrition Programme with food inflation.

Infrastructure and economic reform

The budget prioritises infrastructure as a key driver of productivity and exports. Ramaphosa said public spending on infrastructure will exceed R1 trillion over the next three years. These funds are earmarked for roads, rail lines, energy expansion, and water and sanitation systems.

Ramaphosa said the government is also mobilising private investment through public-private partnerships, particularly in electricity, rail, and port operations, while maintaining state ownership of strategic assets. He said these efforts are supported by Operation Vulindlela, which continues to drive reforms in telecommunications, water, and logistics.

Municipal support and small business relief

The President said the budget acknowledges that many municipalities are in financial distress due to weak revenue collection and poor management. To address this, R19.2 billion will be reallocated over the medium term to reform electricity, water, and waste services in metros. He said these allocations will be strictly linked to performance targets to ensure funds are not misused.

To support job creation, an additional R4.1 billion has been allocated to the Presidential Employment Stimulus. The President said the budget also provides relief for small businesses by more than doubling the VAT registration threshold and significantly increasing the capital gains tax exemption for those selling or transferring their businesses.

Ramaphosa said the budget is a balanced response to the realities of high unemployment and urgent infrastructure needs. He said the government remains committed to fiscal discipline and targeted investment to improve the material conditions of every South African.

-SAnews.gov.za