By President Cyril Matamela Ramaphosa,
Last week, the Minister of Finance presented the Medium-Term Budget Policy Statement (MTBPS) in Parliament, which showed just how far we have travelled along the path of restoring the health of our public finances.
For many of us, the state of the country’s public finances might feel like something far removed from the struggles of daily life.
But the truth is, the decisions we make about how we raise, spend and manage public money have a direct impact on our lives. They determine whether our children get a good education, if our local clinics and hospitals actually work, if our roads are kept in good shape, and if our economy can finally create the jobs people so desperately need.
Over the last few years, we have been walking a difficult path: to both stabilise our public finances and tackle the high levels of poverty and unemployment in our country.
We have been working to recover and clean up the mess left behind by state capture, which weakened our institutions, hurt economic growth and drove up our public debt. The COVID-19 pandemic made this worse, as government had to implement a stimulus package to protect workers, communities and businesses from the worst effects of the subsequent economic contraction.
As our debt went up, so did the cost of paying interest on it. Every rand we spent on interest was a rand that couldn’t be used to build a school, build houses, equip a hospital, fix a road or provide essential services. We simply couldn’t let that continue forever.
For the first time in nearly two decades, public debt has stabilised, and it is now beginning to decline. Since 2023, we have maintained a primary budget surplus, meaning that, excluding debt service costs, we have been spending less than we have been earning. This allows us to further reduce our debt and lower the cost of borrowing, while increasing confidence in our economy.
These improvements are part of a bigger economic recovery. The end of load shedding, our improved fiscal position and our removal from the Financial Action Task Force (FATF) grey list have contributed to the rise in public confidence and our first sovereign credit rating upgrade in over 16 years.
The recovery of the South African Revenue Service following the era of state capture has enabled better collection rates.
This is revenue being used to deliver tangible benefits to the South African people as more resources are made available for social and development spending. It is being used to build more schools and clinics, improve public services, deliver social grants and invest in public infrastructure that communities rely on.
We are allocating more funds to combat gender-based violence and femicide. This includes additional funds to hire more than 3,500 social workers and to improve the capacity of our forensic and investigative services to ensure gender-based violence cases result in successful prosecution and conviction.
The social wage, which covers health, education, social development and services for low-income households, makes up around 60% of non-interest spending. It funds free basic services for over 11 million households, school meals and grants to more than 18 million beneficiaries.
We know the rising cost of living is putting a massive strain on households. The temporary reduction in the fuel levy announced by the Minister is one of the ways we are trying to provide some relief.
The improved fiscal position allows us to invest more in infrastructure, which is an essential driver of inclusive economic growth and job creation. Payments for capital assets are the fastest-growing item in our budget, and new measures have been put in place to increase private sector investment in infrastructure.
The improved financial position is being supported by the reform of the budgeting process. We are fundamentally changing how public money is being spent, monitored and accounted for.
However, fixing our finances isn’t just about collecting more tax or cutting debt. It is also about making sure every single rand of public money is spent wisely, honestly and effectively. We are eliminating waste and inefficiencies in government programmes. We are phasing out programmes that perform badly or lack clear outcomes. This process is already producing measurable savings. More than R11 billion in savings has been identified in the medium term from rationalising low-priority programmes.
This means that we are making targeted savings rather than indiscriminate cuts to departmental budgets to reduce overall spending. As part of this approach, we are reviewing the Infrastructure Conditional Grant to assess why provinces and municipalities underspend, why projects are not delivered on time and within budget, and why the quality of deliverables is poor in many cases. Our aim is not to spend less but to spend smarter.
Beyond the funds that have been dedicated over the next three years to growing the economy, creating jobs and fighting poverty, this MTBPS signals confidence and stability. It shows that we have made significant progress along the path of recovery and demonstrates our commitment to continue along that path. In doing so, we are steadily improving the conditions for far greater investment, growth and job creation.
We know that many South Africans haven’t felt the benefits of this economic recovery yet. 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. A country that manages its money responsibly is better equipped to protect its most vulnerable citizens, handle economic shocks, attract investment and build for the future. The progress we are seeing gives us confidence that we are moving in the right direction.
It also puts a bigger responsibility on the government to make sure these financial gains turn into real improvements that South Africans can actually see and feel. Our job now is to turn financial stability into economic opportunity and a better quality of life for everyone.
At the end of the day, that is what responsible management of public money is all about: not just a healthier balance sheet for the government, but a better life for the people of South Africa.
