- Tax Changes: - VAT increased by 0.5% in May 2025 and another 0.5% in April 2026, reaching 16%. - Additional 42.5 billion rand raised over two years to fund public services. - Welfare grants increased above inflation, more food items exempted from VAT, and fuel levy unchanged to aid low-income households.
- Infrastructure Investment: - 1.03 trillion rand allocated over three years for roads, energy, water, and sanitation. - 46.7 billion rand added to medium-term infrastructure plans. - New structure to coordinate state participation in projects and public-private partnerships. - Performance-based grants for local governments improving service delivery.
- Budget and Debt: - Budget deficit forecast at 5% of GDP for 2024-25, narrowing to 3.5% by 2027-28. - Public debt expected to peak at 76.2% of GDP in 2025-26. - Debt-service costs to peak at 21.7% of revenue in 2024-25. - Gross borrowing requirement at 415.7 billion rand for 2024-25, rising to 582 billion rand in 2025-26.
- Economic Growth: - Growth projected at 1.8% annually over the next three years. - Logistical challenges, including railways and ports, remain constraints.
- Revenue and Spending: - South African Revenue Service to receive additional 4 billion rand. - Total government spending to grow at 5.6% annually, reaching 2.83 trillion rand by 2027-28. - New allocations include: - 46.7 billion rand for infrastructure. - 35.2 billion rand to extend Covid-19 relief grants. - 23.4 billion rand for state employee pay agreements. - 8.2 billion rand for increased welfare grants. - 5 billion rand for a peacekeeping mission in the Democratic Republic of Congo.
- Other Initiatives: - Credit guarantee vehicle to mobilize private capital for energy, transport, and water projects. - Final 70 billion rand debt takeover for Eskom replaced with 40 billion rand advance in 2025-26. - Discussions on long-term fiscal anchors initiated.
