‘ECONOMIC RECOVERY HAS BEGUN!’ – Ramaphosa hails budget turnaround

Cape Town – President Cyril Ramaphosa says the 2026 national budget marks a decisive step in accelerating South Africa’s economic and social recovery, with a strong focus on inclusive growth, job creation and poverty reduction.

In his weekly newsletter on Monday, Ramaphosa said last week’s budget tabled by Finance Minister Enoch Godongwana “will accelerate the momentum of inclusive growth, create jobs and tackle poverty.”

“Every budgetary allocation is a developmental choice: ensuring there are teachers in classrooms, nurses and doctors in clinics, electricity and basic services in homes and businesses, infrastructure to grow the economy, and employment opportunities for communities,” the president said.

Ramaphosa said the budget builds on efforts over recent years to stabilise public finances and reform the economy following a prolonged period of uncertainty.

“Improvements in public finances, stabilising debt, a narrowing budget deficit, credit rating upgrades and improved market confidence all signal the beginning of an economic recovery,” he said.

This year’s Budget focus on three imperatives: maintaining fiscal sustainability, driving inclusive growth and protecting society’s most vulnerable. It is a balanced budget that reflects the realities of our economy, limited financial resources, high unemployment and urgent… pic.twitter.com/2qjruhGxHV

— Cyril Ramaphosa 🇿🇦 (@CyrilRamaphosa) March 2, 2026

He added that a stable macroeconomic environment would “boost investor confidence and increase government’s capacity to invest in both growth and poverty relief without compromising sustainability.”

The president said the stabilisation of public finances had created space to accelerate public investment and sustain the social wage, which accounts for more than 60% of government spending after interest payments.

According to Ramaphosa, this year’s allocation will enable government to provide healthcare services to 84% of the population, social grants to 26.5 million beneficiaries and free basic services to more than 11 million indigent households. It will also support about 13.6 million learners in schools.

“This is a redistributive budget that reduces inequality, builds the capabilities of our people and strengthens the foundations for inclusive growth,” he said.

Additional spending has been set aside to employ more educators and expand early childhood development, with funding aimed at reaching an additional 300,000 children. The National School Nutrition Programme will also be adjusted to account for rising food prices.

Improved infrastructure

Infrastructure investment remains central to the recovery plan. Ramaphosa said public spending on infrastructure would exceed R1 trillion over the next three years, covering roads, rail, energy, water and sanitation projects.

“Improved infrastructure lowers the cost of doing business, raises productivity and supports our country’s exports,” he said.

While government will retain ownership of strategic national infrastructure, it is seeking to mobilise private investment and expand public-private partnerships, particularly in electricity, rail and ports.

Ramaphosa said reforms under Operation Vulindlela were continuing across energy, telecommunications, water and logistics to remove structural constraints on growth.

The president acknowledged that many municipalities remain in financial distress due to weak revenue collection, poor management and service delivery backlogs.

“For several years, water and electricity revenue has not been invested in infrastructure maintenance or expansion, but has been redirected to cover other municipal costs,” he said.

To address these challenges, R19.2 billion will be reallocated over the medium term to reform electricity, water, sanitation and solid waste services in metros, with funding linked to performance targets. The Municipal Infrastructure Grant is also being restructured to tackle underspending and misuse of funds.

Over the next three years, R86.9 billion has been allocated to support the provision of free basic services to indigent households.

Small and informal businesses 

On job creation, Ramaphosa said additional support would go towards mass public employment programmes and small businesses.

An extra R4.1 billion has been allocated to the Presidential Employment Stimulus to expand work opportunities for young people.

To ease regulatory burdens on small enterprises, the VAT registration threshold has been more than doubled, while the capital gains tax exemption for small business owners selling or transferring their businesses has been significantly increased.

“Together, these measures will help small and informal businesses to grow and employ more South Africans,” Ramaphosa said.

He described the 2026 budget as guided by three imperatives: “maintaining fiscal sustainability, driving inclusive growth and protecting society’s most vulnerable.”

“It is a balanced budget that reflects the realities of our economy, limited financial resources, high unemployment and urgent infrastructure needs,” the president said.

“As we build on the momentum of our recovery, we will continue to be guided by fiscal discipline, structural reform, targeted investment and an overarching commitment to improving the material conditions of every South African.”