President Ramaphosa Signals Guarded Optimism Ahead of Budget

Replying to the debate on the State of the Nation Address (SONA) on 19 February 2026, the President said the country stands “on the cusp” of faster growth after nearly two decades of sluggish expansion.

As South Africa heads into next week’s Budget Speech, President Cyril Ramaphosa has shifted the national tone from post-crisis recovery to cautious optimism, pointing to improving economic indicators and renewed reform momentum.

Replying to the debate on the State of the Nation Address (SONA) on 19 February 2026, the President said the country stands “on the cusp” of faster growth after nearly two decades of sluggish expansion.

“We have not experienced the excitement and the promise of rapid growth for almost 20 years, but we are on the cusp of achieving it now. We are focused on rebuilding the economy and driving investment,” Ramaphosa said.

Four Quarters of Growth

The President cited four consecutive quarters of positive GDP growth:

• 0.6% in Q4 2024

• 0.1% in Q1 2025

• 0.8% in Q2 2025

• 0.5% in Q3 2025

While modest, he said the data reflects “building momentum of change.” Inflation has remained steady between 3.5% and 3.6% since October, easing cost-of-living pressures and enabling lower borrowing costs.

Improved macroeconomic indicators, he noted, translate into tangible benefits: lower debt service costs free up funds for health, education and policing, while reduced inflation eases pressure on households.

Removing Growth Impediments

Ramaphosa said government is tackling long-standing structural constraints that have weighed on investment and competitiveness.

Among the interventions:

• Ending severe load shedding that had crippled production and deterred investment

• Improving port and rail efficiency through infrastructure investment and reforms

• Strengthening policy formulation and reducing regulatory burdens

• Professionalising the public service and modernising procurement systems

Municipal dysfunctionality — described as one of the most immediate impediments to growth — is being addressed through a review of the White Paper on Local Government and targeted interventions in struggling municipalities.

“The transformation of our network industries is the platform on which rapid inclusive economic growth will be achieved,” he said.

IMF Sees Growth Accelerating

The President’s optimism is reinforced by the International Monetary Fund (IMF), which this month projected South Africa’s growth to accelerate to 1.4% in 2026 and 1.8% over the medium term, supported by consumption and structural reforms.

The IMF estimated 2025 growth at 1.3%, with inflation averaging 3.2%, allowing for a shift toward a 3% inflation target by end-2027. However, it cautioned that public debt — at 77% of GDP at end-March 2025 — remains elevated, with risks tilted to the downside amid global trade tensions and reform fatigue.

Despite global uncertainty, the IMF noted South Africa’s resilience, citing independent institutions, strong monetary policy and structural reform efforts.

Confidence Boosters: FATF Exit and Ratings Upgrade

In October 2025, South Africa was removed from the Financial Action Task Force (FATF) grey list after strengthening anti-money laundering frameworks — a development hailed as a boost to business confidence.

Shortly thereafter, S&P Global upgraded the country’s credit rating from BB- to BB with a positive outlook — the first upgrade in over 16 years. The ratings agency cited improving fiscal management, structural reforms and Eskom’s turnaround, including its first profit in eight years.

National Treasury said the upgrade reflects improving growth prospects and fiscal consolidation, with government on track to post its third consecutive primary budget surplus in fiscal 2025.

Guarded Optimism, Collaborative Push

Ramaphosa acknowledged that challenges remain, including high debt service costs, global economic fragmentation and municipal governance weaknesses. But he urged collective action to sustain reform momentum.

“We don’t all have the same role, but every role matters,” he said, calling for collaboration between government, business and citizens.

In a metaphorical appeal, he urged South Africans to “build like beavers — with urgency, unity and quiet determination,” stressing that long-term stability and inclusive growth depend on sustained cooperation.

As Finance Minister prepares to table the Budget next week, the President’s message signals a pivot: from stabilisation to acceleration — tempered by realism, but underpinned by growing confidence in reform-led recovery.