Budget Milestones Signal SA’s Return to Fiscal Credibility

“For the first time in 17 years, government debt is stabilising. Never have we been happier to hear the word ‘stabilising’ than we were yesterday. And South Africa has exited the grey list,” Mkosi said.

Key economic indicators in the 2026 National Budget point to strengthening global confidence in South Africa, as structural reforms and fiscal discipline begin to yield measurable results.

Addressing a post-Budget breakfast in Cape Town, Brand South Africa (Brand SA) Deputy Chairperson of the Board of Trustees, Zama Mkosi, described the stabilisation of public debt and narrowing deficit as pivotal signals of restored credibility.

Debt Stabilises for First Time in 17 Years

For the first time in 17 years, government debt has stabilised as a share of GDP.

According to the 2026 Budget:

• Gross debt stabilised at 78.9% of GDP in 2025/26

• Debt is projected to fall to 77.3% in 2026/27

• It is expected to decline further to 76.5% by 2028/29

Meanwhile, the consolidated budget deficit has narrowed to 4.5% of GDP in 2025/26, improving from 4.8%, and is projected to decline to:

• 4% in 2026/27

• 3.1% in 2027/28

“For the first time in 17 years, government debt is stabilising. Never have we been happier to hear the word ‘stabilising’ than we were yesterday. And South Africa has exited the grey list,” Mkosi said.

Reforms Strengthen Global Standing

Government’s economic strategy remains anchored on four pillars:

• Maintaining macroeconomic stability

• Implementing structural reforms

• Investing in growth-enhancing infrastructure

• Building state capacity

Mkosi said these pillars, combined with disciplined fiscal management, have strengthened South Africa’s global standing at a time when capital markets are cautious and competition for investment is intense.

“In today’s global environment, credibility matters. The Budget Speech is more than just numbers — it is a statement of intent, transparency and accountability,” she said.

Operation Vulindlela Driving Reform

South Africa’s reform momentum is being driven through Operation Vulindlela — the structural reform programme aimed at:

• Stabilising energy supply

• Fixing logistics bottlenecks

• Improving municipal service delivery

• Accelerating economic growth

National Treasury’s reform agenda has contributed to:

• Removal from the Financial Action Task Force (FATF) grey list

• The first credit rating upgrade in 16 years

• Easing of borrowing costs

• Stabilisation of public debt

Mkosi said these milestones are not abstract indicators but tangible signals of restored confidence.

“These are important signals of renewed credibility and a country regaining its economic footing,” she said.

Nation Brand and Investor Confidence

From a nation-brand perspective, Mkosi emphasised that fiscal credibility directly affects South Africa’s cost of capital, investor sentiment and ability to attract long-term partnerships.

“How South Africa is perceived internationally affects whether our challenges are seen as permanent risks or as part of a reform process we are managing responsibly,” she said.

Brand SA’s mandate, she added, is to amplify credible progress, strengthen consistent messaging and ensure alignment between policy ambition and implementation.

“Reputation is not built overnight, nor sustained by rhetoric. It is built through alignment — between policy and delivery, and between ambition and outcomes.”

Balancing Discipline and Growth

The 2026 Budget reflects what government describes as a disciplined yet growth-oriented fiscal strategy, designed to stabilise debt while creating space for infrastructure investment and development.

As borrowing costs ease and debt levels stabilise, Treasury argues that fiscal space will gradually expand to support economic recovery and inclusive growth.

Mkosi concluded that restoring credibility is foundational to rebuilding trust — both domestically and globally.

“In a competitive global economy, confidence is currency. And South Africa is beginning to earn it back.”