As Finance Minister Enoch Godongwana prepares to deliver the Medium-Term Budget Policy Statement (MTBPS) on 12 November, the stakes could hardly be higher.

South Africa’s public finances are stretched to the limit, with debt levels more than doubling since 2008 and debt-servicing costs now consuming over 20 cents of every rand of revenue, up from just 6 cents fifteen years ago.

The country’s fiscal deficit has ballooned into a multiple of the economic growth rate, underscoring a structural imbalance between revenue collection and expenditure. Tax-to-GDP levels have already exceeded the point of diminishing returns, leaving no room for further tax increases without stifling growth and weakening compliance.

Ratings agencies and investors will watch closely for signals of whether the government intends to stabilise debt through expenditure restraint or seek new sources of revenue.

Yet an analysis by a Johannesburg-based advisory firm Frans Cronje Private Clients (FCPC) suggests that the outlook may not be as bleak as headline figures imply. The firm’s research indicates that South Africa has considerable scope to improve its debt and deficit positions; not through higher taxes, but by addressing leakages and inefficiencies that drain the public purse.

According to FCPC estimates, the fiscus loses at least R80 billion annually to illicit economic activity across the pharmaceutical, alcohol, mining, and tobacco industries. The firm argues that tightening customs and excise enforcement, improving tracking systems, and strengthening border controls could recover enough revenue to cut the national deficit by roughly one percentage point.

Beyond the shadow economy, FCPC identifies as much as R300 billion in potential savings through tackling corruption and inefficiency in state procurement. Audits across public entities, the firm notes, repeatedly expose inflated tenders, unnecessary intermediaries, and poor contract oversight.

Addressing these weaknesses would not only restore fiscal space but also rebuild confidence in the government’s ability to manage public resources responsibly.

FCPC further highlights an estimated R75 billion that South African households lose annually to gambling – money that drains consumption and savings potential from the real economy. The firm argues that better regulation could ensure that much of that money stays in the hands of South African families, redirecting household spending toward productive sectors and boosting both tax receipts and consumer welfare.

Taken together, the firm calculates that approximately R500 billion could be recovered or redirected through effective policy and enforcement measures; a sum large enough to eliminate the deficit outright while doubling the state’s social grants spending.

Godongwana, who has built a reputation as a fiscal pragmatist, will need to balance political pressures for higher spending against the market’s demand for discipline. His statement on 12 November will signal whether Treasury intends to double down on consolidation or pivot toward regulatory moves with real potential to alter the strained fiscal environment.

The view of this newspaper is that South Africa’s fiscal crisis is not only a matter of limited means, but of misdirected ones. A government willing to enforce accountability and efficiency could yet reclaim the fiscal space it has lost and restore credibility to the country’s public finances.