By Lehlohonolo Lehana.
President Cyril Ramaphosa says for the first time in nearly two decades, progress has been made in stabilising public debt and improving the country’s fiscal position.
In his weekly presidential newsletter, Ramaphosa attributed the country’s earlier fiscal difficulties partly to state capture, which weakened institutions, undermined economic growth and increased public debt, with the COVID-19 pandemic further intensifying financial pressures.
According to the President, the country’s improving fiscal health gives concrete evidence that South Africa is moving in the right direction.
Ramaphosa detailed how the recovered revenue is being directly channelled into public infrastructure and social development, highlighting that around 60% of non-interest spending is dedicated to the social wage, supporting health, education, and services for low-income households.
This includes providing free basic services to over 11-million households, funding school meals, and distributing grants to more than 18-million beneficiaries.
The President explained that government is allocating additional funds to fight gender based violence and femicide. This targeted funding will hire over 3 500 new social workers and improve the investigative and forensic capacity for successful prosecutions.
Acknowledging the financial pressure on citizens, Ramaphosa highlighted the temporary reduction in the fuel levy as a direct measure to provide household relief.
Infrastructure remains the fastest-growing item in the national budget and Ramaphosa noted that new mechanisms are being introduced to attract more private sector co-investment to spur inclusive economic growth and job creation.
A key component of the country’s improved fiscal outlook is a fundamental shift in how public funds are managed.
The President explained that government is moving away from indiscriminate departmental budget cuts, opting instead for targeted, efficiency-driven savings.
Through the rationalisation of low-priority or underperforming programmes, the State has already identified more than R11-billion in medium-term savings.
Furthermore, a strict review of the Infrastructure Conditional Grant is underway to investigate why provinces and municipalities routinely underspend, delay projects, or deliver substandard work.
“Our aim is not to spend less but to spend smarter,” Ramaphosa noted, stressing that fixing the nation’s finances requires making sure every single rand is spent honestly and effectively.
While the latest Medium Term Budget Policy Statement (MTBPS) signals stability and builds investor confidence, Ramaphosa cautioned against complacency.
Ramaphosa said government remains aware that many South Africans had yet to experience the benefits of the economic recovery.
“Unemployment is still far too high, too many families are struggling to get by and too many communities are dealing with poor services.”
“We shouldn’t mistake financial stability for the end of the road. There is still a lot of work to do. But we should recognise how far we have come,” he said.
He said the MTBPS signals greater confidence and stability, while demonstrating government’s commitment to economic recovery, investment, growth and job creation over the medium term.
The President emphasised that responsible financial management is important not only for attracting investment and responding to economic shocks, but also for protecting vulnerable citizens and building a stronger future.