South Africa’s government expenditure has increased dramatically over the past two decades, marking a significant shift in the country’s fiscal landscape. In the early years of democracy, spending was brought under control, with government expenditure as a share of GDP declining steadily while economic growth accelerated as a result of pragmatic policy choices. By the mid-2000s, disciplined fiscal policy allowed for increased social and infrastructure investment while still maintaining budget surpluses.

The trend changed after the 2008 global financial crisis. Since then, government spending has surged as the state responded to slower growth, rising social demands, and persistent unemployment. Total expenditure as a percentage of GDP climbed from just over 26% in 2008 to well above 30% in the early 2020s, a level last seen during the final years of apartheid. Much of the increase went to social grants, public sector wages, and servicing a growing public debt burden.

Rising spending has provided important support to vulnerable households and helped maintain basic services, but it has also placed severe pressure on the national budget. With revenue growth lagging, sustained high expenditure levels have contributed to persistent deficits and rapidly rising government debt.

Looking ahead, the challenge for South Africa will be to balance the social and economic benefits of public spending with the need to restore fiscal sustainability and rebuild capacity for growth-oriented investment.