Finance Minister Enoch Godongwana used Wednesday’s medium term budget speech to confirm that South Africa’s debt ratio will stabilise at 77.9% of GDP in 2025/26. Revenue is R19.3 billion above earlier estimates, while lower borrowing costs have created room for R15.8 billion in extra spending on education, HIV programmes, and disaster relief.

Treasury warned of a R15.7 billion revenue shortfall over the next two years and outlined R6.7 billion in spending cuts. Government also introduced a new 3% inflation target with a one-point band (meaning the new inflation target is between 2% and 4%) and signalled possible 2026 tax hikes unless SARS improves collections.