Finance Minister Enoch Godongwana told Parliament on Wednesday that South Africa's debt has stabilised relative to the size of the economy for the first time in nearly two decades, even as he cut this year's growth forecast.

"For the first time in nearly two decades, our debt-to-GDP stabilised, at 78.4% of GDP in 2025/26," Godongwana said in his medium-term budget policy statement. This is a developing story and figures are drawn from published coverage of the speech.

What the minister announced

Godongwana presented the statement on 21 October 2026. He said growth "remains too low" and committed the government to structural reforms, stronger state capability and faster delivery of public infrastructure.

He also said a fiscal anchor will be written into law next year. Treasury says draft legislation was released for public comment in October. According to Treasury, the law would make fiscal sustainability a standard in the Public Finance Management Act "instead of a rigid numerical rule", so there would be no numerical debt ceiling. Each new administration would prepare a fiscal plan after a general election, and any deviation would have to be explained to Parliament after review by the Financial and Fiscal Commission.

Debt, deficit and growth

Treasury says debt-service costs remain too high and that over the medium term the state will spend more on interest than on health, social development or basic education. Treasury director-general Duncan Pieterse said fiscal space opened because of higher revenue and lower-than-expected spending.

Fuel levy, El Nino reserve and commissions

Godongwana announced a temporary cut to the fuel levy of R1.50 a litre on petrol and R3 a litre on diesel from 4 November. Treasury puts the cost at about R10 billion in foregone revenue.

The contingency reserve rises to R10 billion in 2026/27 to cover drought, El Nino and possible energy price spikes, according to the statement. The minister also announced R45.5 billion in total extra spending, including R823 million for Operation Prosper, the military deployment against illegal mining.

He set aside additional money for the Madlanga, Khampepe and Nkabinde commissions of inquiry. Published reports give the amount as R516 million in one place and R560 million in the minister's quoted words; the allocation per commission was not given.

Treasury says it expects Fitch and Moody's to update their South African reviews before the end of 2026 and to recognise the improvements.

What we do not yet know

  • Published reports differ on whether an overall deficit figure was stated; the 4.3% figure comes from one report. Check the budget document.
  • The commissions' funding is reported as both R516 million and R560 million. The correct figure and the split are not yet confirmed.
  • How the rating agencies will respond is Treasury's expectation, not a forecast we can verify.