IMF expects Godongwana to maintain budget surplus target of 1.5% of GDP:
The International Monetary Fund expects Finance Minister Enoch Godongwana to maintain a primary budget surplus target of 1.5% of GDP, its mission chief for South Africa Delia Velculescu said.
“What we would hope and expect from it is to see adherence to the primary surplus target that was announced in the medium-term budget statement, so the 1.5% of GDP primary surplus, we hope that will be maintained,” Velculescu told the Mail & Guardian.
“And, importantly, we hope the budget will specify the reforms needed to get there.”
She said controlling the public sector wage bill would be critical and commended government’s plans to address inefficiencies and provide incentives for early retirement.
The IMF will also be looking for reforms to improve procurement efficiency and transparency, as well as continued close oversight of state-owned enterprises and measures to boost administrative efficiency, including cutting redundant and inefficient programmes.
“We know the authorities have undertaken a number of spending reviews in these areas and what we expect to see in the budget is the outcome of those reviews and the policies and reforms that will achieve those savings,” Velculescu said.
The IMF executive board concluded its 2025 Article IV consultation with South Africa in early February, noting that the economy had proven resilient to renewed global turbulence linked to greater protectionism, fragmentation and heightened policy uncertainty.
“Our recent mission has found that South Africa’s economy has been resilient despite renewed global turbulence last year. Indeed, growth rebounded, the Rand appreciated, the stock market increased and bond yields declined,” Velculescu said, attributed these positive developments to strong institutions, a credible monetary framework and a flexible exchange rate.
She said the move to a lower 3% inflation target, the country’s exit from the Financial Action Task Force greylist and infrastructure reforms under Operation Vulindlela were important domestic achievements.
“In this context, we have revised up our growth projection in the near term and expect growth to reach around 1.3% in 2025 and 1.4% this year and gradually rise to 1.8% in the medium run,” she said.
Continued resilience in domestic consumption would support growth alongside declining inflation and interest rates, while ongoing structural reforms would have a positive impact, she said, adding: “However, we do see risks on the horizon and those are tilted on the downside related to an intensification of fragmentation and protectionism in the global economy as well as tighter global financial conditions.”
A slowdown in domestic reforms would pose additional risks to growth. The IMF’s policy recommendations focus on reforms needed to support macroeconomic stability and resilience against external shocks while pivoting towards higher and more inclusive growth.
“The authorities’ objective to reduce public debt in the near term and reduce it to around 70% in the longer term is appropriate and necessary to rebuild buffers and maintain macroeconomic stability and resilience,” Velculescu said.
She emphasised that the 2026 budget must deliver on the 1.5% primary surplus target by clearly specifying and fully implementing the reforms required to achieve it.
The IMF said the 3% inflation target should bring greater stability and lower borrowing costs for households, firms and the government.
“The central bank should continue basing its decisions on economic data while communicating clearly to help guide inflation expectations towards a new target,” Velculescu said.
Growth-enhancing structural reforms were essential to strengthening resilience, raising South Africa’s potential growth rate, reducing high unemployment and supporting fiscal sustainability.
“And here the authorities have already made notable progress in electricity, logistics and water reforms under Operation Vulindlela, including by opening up electricity and logistics to private sector participation and competition,” she said.
The IMF is recommending that South Africa implement an ambitious package of reforms to reduce regulatory barriers to business, address governance weaknesses and advance labour market reforms to unlock jobs and growth.
The Sona debate reflects degeneracy in parliament:
The recent State of the Nation Address (Sona) debate exposed a profound level of political degeneracy and ideational bankruptcy within South Africa’s Parliament. It offered a revealing window into the disposition, priorities and intellectual outlook of the country’s three principal political formations: the African National Congress (ANC), the Economic Freedom Fighters (EFF), and the uMkhonto weSizwe Party (MKP). The majority of black South Africans have invested considerable political hope and expectation in these parties. Yet the Sona debate demonstrated that such expectations are largely misplaced. These formations appear overwhelmingly preoccupied with the preservation of their middle-class lifestyles and material comfort, while displaying little genuine concern for the broader sociopolitical obligations they claim to champion. Despite presenting themselves as agents of liberation and transformation, their parliamentary conduct reveals a striking indifference to the lived realities of the majority.
The debate underscored a worrying lack of capacity, readiness and seriousness to govern. Collectively, these parties appear ill-equipped to occupy the highest levels of state power, leaving the country exposed and vulnerable. What emerged was a profound leadership deficit at the national level, accompanied by the erosion of governance capability. Ordinary citizens are effectively left out in the cold, with no credible political alternative to turn to. The dominant political actors appear unable—or unwilling—to read the political environment accurately or to grasp prevailing public sentiment and shifting sociopolitical dynamics. The era of political symbolism devoid of substance has clearly reached its limits. Military fatigues, red overalls and three-piece suits draped with national-flag scarves no longer inspire confidence or convey revolutionary seriousness.
These performative symbols, combined with a confrontational and militarised parliamentary culture, have failed to produce constructive or meaningful outcomes. Instead, they have become hollow rituals masking intellectual emptiness. During the Sona debate, the three parties largely engaged in adversarial posturing and derisive rhetoric, prioritising spectacle and partisan theatrics over substantive engagement. This occurred against the backdrop of a nation confronting multiple, overlapping crises.
Communities remain terrorised by illegal mining syndicates; farmers are suffering severe losses due to foot-and-mouth disease; many households continue to endure inadequate access to water and sanitation; neighbourhoods are ravaged by persistent gang violence; and schoolchildren are dying in preventable scholar transport incidents.
At the same time, university students protested outside Parliament over the chronic shortage of student accommodation. Equally disturbing is the plight of South African youth trapped in the Donbas region amid the Russia–Ukraine conflict—an illustration of enduring economic marginalisation and vulnerability to exploitation. Yet for many parliamentary representatives, the impoverished communities from which these young people originate appear to be little more than abstract statistics rather than human lives demanding urgent intervention.
Earlier the President announced that the Ministers responsible for Water and Sanitation, as well as Cooperative Governance and Traditional Affairs, had been excused from attending the actual Sona sitting to attend to the Gauteng water crisis. However, information that emerged the following day revealed that the Minister of Water and Sanitation had travelled to Addis Ababa to attend an African Union summit.
Since the authority to approve international travel by Cabinet members rests with the President, this sequence of events suggests a deliberate political judgement regarding the relative importance of a domestic water emergency versus participation in continental diplomacy.
As long as the middle-class status of political elites remains secure, meaningful sociopolitical change is unlikely. Existing patterns of governance failure will persist. This reality was on full display during the debate, as some parliamentarians actively instigated taunts and disruptions while others remained passive, allowing parliamentary decorum and established procedural norms to collapse.
The EFF advanced sensational and unsubstantiated allegations, claiming that certain politicians engage in occult practices involving the killing of foreign nationals to secure electoral success. The ANC, in turn, accused former President Jacob Zuma of facilitating the metaphorical “sale” of young South Africans into the Russia–Ukraine war. Across the chamber, members exchanged personalised insults—“Rupert’s ice boy,” “Tiger,” “Weekend Special,” and “Stellenbosch ice boy”—reducing parliamentary discourse to a spectacle of ridicule and insult. Frivolous points of order proliferated as members indulged in what amounted to an orgy of political frivolity.
While black political leaders immerse themselves in internal rivalries and theatrical banter, they consistently overlook a fundamental truth: it is their own constituencies that bear the cost of this failure. Since 1994, the lack of meaningful socioeconomic transformation has disproportionately harmed black communities, condemning many to decaying infrastructure, high crime, persistent poverty and mass unemployment. Yet upon achieving a degree of middle-class security, many leaders abandon the very communities that propelled them into power. This public spectacle undermines the credibility of black political leadership both domestically and internationally. It tacitly permits other racial groups to dismiss black communities as unserious and undeserving of sustained engagement.
Ultimately, if leaders who emerge from marginalised communities fail to prioritise the most vulnerable, there is little reason to expect external actors to do so on their behalf. Political parties that claim to represent black people continue to elevate the least capable and most disconnected individuals into positions of power. Their parliamentary performance reflects a profound detachment from social realities and confirms an inability to manage a complex modern economy or address the entrenched marginalisation of an indigenous majority historically excluded from power.
The middle-class cohort dominating Parliament consistently underutilises its access to state power and governance authority. In doing so, it squanders critical opportunities to implement policies that could materially transform the lives of their constituents. As marginalised communities continue to invest electoral trust in these representatives, they often remain unaware of how precarious their own structural position remains. This crisis is likely to deepen.
Political actors appear primarily concerned with preserving their middle-class lifestyles, rather than constructing a coherent political project aimed at collective advancement. There remains no consolidated black hegemonic elite capable of articulating and advancing a compelling ideological vision for socioeconomic transformation. Until such leadership emerges, Parliament will remain a theatre of degeneration rather than an instrument of liberation.
Dr Mabutho Shangase is a senior lecturer in Political Studies and International Relations at North-West University – @ nativconscience
It’s time for a community-centred budget:
As South Africa awaits the national budget speech, the debate is already framed around familiar themes: fiscal consolidation, debt stabilisation and constrained revenue. These are legitimate concerns. But the deeper question is whether this budget will meaningfully shift the development model toward communities, where unemployment, hunger, and climate shocks are most acutely felt.
A credible budget in 2026 cannot be based solely on spreadsheets. It must rebalance power and investment toward the local economies that sustain the majority of South Africans.
For too long, our fiscal framework has leaned heavily toward centralised programmes and capital-intensive infrastructure, often with weak linkages to local employment creation. While infrastructure investment remains essential, it cannot substitute for targeted support to smallholder farmers, township enterprises, youth cooperatives and community-based organisations. These actors generate high employment multipliers per Rand spent and anchor economic resilience at the household level.
In rural districts and peri-urban settlements, food insecurity is not an abstract statistic; it is a daily reality. Budget allocations must therefore treat community-based agriculture, irrigation schemes, agro-processing hubs and extension services as core economic investments, not peripheral social programmes. Strengthening local food systems reduces vulnerability to price shocks, creates jobs and improves nutritional outcomes. It is a fiscally prudent intervention with measurable social returns.
Youth unemployment remains South Africa’s most destabilising economic fault line. Temporary public employment programmes provide relief but they are not structural solutions, particularly when they are short-term, intermittent and disconnected from sustainable livelihood pathways. These programmes must be extended in duration and redesigned to provide longer-term security, skills deepening and opportunities for transition into enterprise or formal employment. A community-centred budget should expand enterprise-linked grants, ringfence procurement for youth-owned businesses and scale digital and green economy initiatives that create asset-building pathways rather than dependency cycles.
If the Just Energy Transition is to mean anything beyond policy rhetoric, it must include community ownership models in renewable energy, waste management and climate adaptation projects. Otherwise, the green economy risks replicating the inequalities of the old one.
Climate adaptation itself must move from conference commitments to ward-level implementation. Floods, droughts and extreme weather events disproportionately affect small-scale farmers and informal settlements. Targeted adaptation grants, subsidised agricultural insurance, water harvesting systems, and responsive disaster funds should feature prominently in the fiscal framework. Investing upfront in resilience reduces the long-term cost of crisis response.
Equally important is governance. A community-centred budget requires transparent allocation, timely disbursement and strengthened municipal capacity. Under-spending, irregular procurement and fragmented implementation erode public trust and blunt developmental impact. Participatory budgeting pilots and improved grant oversight could begin restoring accountability where it matters most, at the local level.
Social protection must also evolve. Grants remain indispensable in a country with entrenched inequality. But integrating productive pathways, linking beneficiaries to training, micro-enterprise development and local economic opportunities, would enhance long-term sustainability without undermining the social safety net.
South Africa’s fiscal space is undeniably tight. Yet austerity alone cannot deliver growth. Strategic investment in community systems is not fiscally reckless; it is economically rational. Stronger local economies reduce future welfare burdens, expand the tax base, and build resilience against shocks.
This budget speech offers an opportunity to redefine what recovery means. Not recovery measured only by debt-to-GDP ratios, but recovery visible in thriving local markets, food-secure households, youth-owned enterprises, and climate-resilient communities.
The numbers will matter. But the signal will matter more.
Will this be a budget that manages decline — or one that seeds renewal from the ground up?
South Africans should expect the latter.
Dr Siphesihle Qange is a programme manager at Seriti Institute
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