Presenting the 2025 Medium-Term Budget Policy Statement (MTBPS) before Parliament in Cape Town, Godongwana outlined the government’s plan to balance short-term challenges with long-term growth and reform.

Godongwana confirmed that public debt will stabilise at 77.9% of gross domestic product (GDP) in 2025/26, marking the first time since the 2008 global financial crisis that debt will not increase as a share of the economy. He said improved revenue collection, coupled with tighter spending controls, has placed SA on a path toward fiscal sustainability.

To reinforce macroeconomic stability, Godongwana announced a revised inflation target of 3%, with a tolerance band of one percentage point, replacing the previous 3–6% range. The adjustment, agreed upon with the SA Reserve Bank, is designed to lower inflation expectations, create space for lower interest rates, and support investment and job creation over time.

Godongwana also reported that the country’s real GDP is expected to grow by 1.2% in 2025 and average 1.8% between 2026 and 2028. He credited structural reforms in the energy and logistics sectors, under Operation Vulindlela, for helping to ease load-shedding, improve port efficiency, and unlock investment in renewable energy and infrastructure.

To tackle wasteful expenditure, Godongwana said the Targeted and Responsible Savings initiative will cut $390 million in low-priority and inefficient programmes. He also unveiled new measures to fight illicit trade and fraud in the social grants system, while improving transparency through a new government procurement payments dashboard.

Highlighting progress under SA’s G20 presidency, Godongwana said the country had successfully placed Africa’s development priorities, including debt sustainability and infrastructure finance, at the centre of the global agenda.

“SA is choosing growth, stability, and reform,” he concluded, reaffirming government’s commitment to disciplined spending and inclusive development.

–ChannelAfrica–