Now that the Budget dust has settled, the headline is clear: stability has been prioritised. Finance Minister Enoch Godongwana delivered a fiscally cautious budget aimed squarely at reassuring investors and protecting demand for South African government bonds. Debt is projected to peak around 79% of GDP.
The deficit narrows gradually. A fiscal anchor is promised. Rating agencies will take comfort. But the uncomfortable truth is this: stabilising at nearly 79% debt-to-GDP is not a triumph. It is an admission that the state has run out of fiscal room.
Stretched balance sheet
At these levels, government is financially constrained. Debt-service costs absorb enormous resources. Policy flexibility shrinks. Infrastructure ambition is limited. The balance sheet is stretched.
Call it what it is: the fiscus is under severe pressure. And that is precisely why growth must now become the central policy objective. GDP is the denominator. If GDP grows meaningfully, the debt ratio falls faster. Revenue expands organically. Social pressure eases. Investment rises. Employment follows.
Almost every fiscal metric improves when the denominator expands. But if growth remains trapped around 1.5% to 2%, the country simply treads water. Debt stabilises slowly. Unemployment remains entrenched.
Opportunity remains constrained. This is why the post-Budget debate cannot end with “the numbers add up”. The numbers add up at mediocrity. The Budget did not announce bold, large-scale private capital mobilisation. It did not unveil sweeping logistics concessions. It did not provide an aggressive, time-bound transmission reform shock. And it did not clearly quantify how private participation will lift potential growth above 3%.
Private sector partnerships
Encouraging private sector participation is not “handing over the country”. It is not surrendering sovereignty. And it is not abandoning social priorities. It is partnering to unlock capacity. Concessions, build-operate-transfer models, independent operators and regulated partnerships are standard tools in growing economies.
The state retains oversight. The public interest is protected. But capital and execution capacity are mobilised at scale. South Africa does not lack potential. It lacks acceleration. We have mineral wealth, renewable energy capacity, agricultural strength, a sophisticated financial sector and entrepreneurial depth. We are a gateway economy to the continent.
Yet we continue to budget for growth barely above population expansion. Why? Because we are managing risk instead of driving expansion. At this stage, fiscal consolidation alone is not reform. It is containment, it protects bond demand, it reassures ratings agencies. It prevents deterioration. But it does not ignite momentum.
Above 3% growth, the story changes dramatically. Debt ratios decline more decisively. Revenue surprises become common. Investor confidence compounds. Employment rises meaningfully. Prosperity broadens. Below 2%, we remain stuck in defensive mode. South Africa cannot stabilise its way to prosperity. It must grow its way there.
Explicit growth targets needed
Government must move beyond a preservation mindset and embrace a growth mindset. Mobilise private capital. Reform logistics decisively. Accelerate energy transmission expansion. Clear regulatory bottlenecks. Set explicit growth targets above 3% and align policy to reach them. GDP is the denominator.
Everything follows. If we truly want employment, inclusion and fiscal sustainability, we must expand the base of the economy. South Africa’s potential is immense. But potential does not translate itself. Come on, government — step on the accelerator.
- Maarten van Doesburgh is Head of Economics at the Cape Peninsula University of Technology, a former Financial Director in JSE-listed companies, and a finance and economics expert and consultant. He is a regular economic commentator on national television and print media. He writes in his personal capacity
