IN CONVERSATION WITH Professor Bonke Dumisa an independent economic analyst
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On 12 November 2025, Finance Minister Enoch Godongwana presented South
Africa’s 2025 Medium-Term Budget Policy Statement (MTBPS), outlining the
government’s updated fiscal and economic framework for the coming years.
The statement comes at a critical time, as the country faces persistent
economic challenges, rising debt, and constrained revenue collection.
The MTBPS highlights the government’s commitment to stabilising and
gradually reducing the debt-to-GDP ratio, while maintaining key investments in
infrastructure and social services. Minister Godongwana also indicated that the
country’s inflation-targeting framework will be adjusted to better anchor price
stability, signaling a cautious approach to monetary and fiscal policy.
Despite these measures, growth remains a major concern. Analysts note that without stronger economic expansion, revenue collection will remain tight,
putting pressure on public-service delivery. The government plans to rely on
improved tax administration, inflation effects, and expenditure reprioritisation
rather than introducing large new taxes, in order to maintain fiscal discipline.
The MTBPS also underscores the government’s intent to encourage private-
sector investment as a complement to public spending. Infrastructure projects,
particularly in transport, energy, and water, remain central to this strategy,
both to stimulate the economy and create jobs.
However, several risks could affect the outlook. Tightening the inflation-target
could slow growth, while high debt levels make the budget more vulnerable to
shocks. Efficient allocation of resources will be essential, particularly in the
context of ongoing political and fiscal pressures.
For ordinary South Africans, the MTBPS provides a glimpse of government
priorities over the next three years. Investment in social services, education,
and infrastructure will determine whether the benefits of public spending reach
communities effectively. For businesses and investors, the statement signals
the government’s commitment to fiscal stability and economic reform, which
will influence the investment climate.
In summary, the 2025 MTBPS seeks to strike a delicate balance: ensuring fiscal
responsibility while supporting growth and service delivery. Its success will
depend on disciplined execution, the ability to mobilise investment, and the
resilience of the economy in the face of global and domestic challenges.
Africa’s 2025 Medium-Term Budget Policy Statement (MTBPS), outlining the
government’s updated fiscal and economic framework for the coming years.
The statement comes at a critical time, as the country faces persistent
economic challenges, rising debt, and constrained revenue collection.
The MTBPS highlights the government’s commitment to stabilising and
gradually reducing the debt-to-GDP ratio, while maintaining key investments in
infrastructure and social services. Minister Godongwana also indicated that the
country’s inflation-targeting framework will be adjusted to better anchor price
stability, signaling a cautious approach to monetary and fiscal policy.
Despite these measures, growth remains a major concern. Analysts note that without stronger economic expansion, revenue collection will remain tight,
putting pressure on public-service delivery. The government plans to rely on
improved tax administration, inflation effects, and expenditure reprioritisation
rather than introducing large new taxes, in order to maintain fiscal discipline.
The MTBPS also underscores the government’s intent to encourage private-
sector investment as a complement to public spending. Infrastructure projects,
particularly in transport, energy, and water, remain central to this strategy,
both to stimulate the economy and create jobs.
However, several risks could affect the outlook. Tightening the inflation-target
could slow growth, while high debt levels make the budget more vulnerable to
shocks. Efficient allocation of resources will be essential, particularly in the
context of ongoing political and fiscal pressures.
For ordinary South Africans, the MTBPS provides a glimpse of government
priorities over the next three years. Investment in social services, education,
and infrastructure will determine whether the benefits of public spending reach
communities effectively. For businesses and investors, the statement signals
the government’s commitment to fiscal stability and economic reform, which
will influence the investment climate.
In summary, the 2025 MTBPS seeks to strike a delicate balance: ensuring fiscal
responsibility while supporting growth and service delivery. Its success will
depend on disciplined execution, the ability to mobilise investment, and the
resilience of the economy in the face of global and domestic challenges.
