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Polity.org.za offers a unique take on news, with a focus on political, legal, economic and social issues in South Africa and Africa, as well as international affairs. Now you can listen to the top three articles on Polity at the end of each day.

  1. 16H AGO

    Treasury mandates sustainability plans as fiscal anchor going forward

    Treasury mandates sustainability plans as fiscal anchor going forward To entrench commitments to healthy public finances, national government will introduce legislation requiring each new administration to table a medium-term fiscal plan to embed fiscal sustainability, Finance Minister Enoch Godongwana confirmed during the 2026 Budget speech on February 25. Since 2008/09, government's debt ratio has more than tripled with debt service costs having risen from 8.8% of revenue in 2008/09 to 21.3% in 2025/26, which crowds out other spending. Over the next three years government aims to anchor fiscal policy with the primary budget surplus, which means a continued expected increase in the fiscal surplus will ensure government debt embarks on a sustainable path. A debt-reducing main budget primary surplus will therefore anchor fiscal policy over the medium term. "National Treasury developed a debt sustainability model to assess risks to the fiscal framework and inform good fiscal decision-making," Godongwana stated, adding that departments would need to be more deliberate in motivating their budgets rather than simply increasing them by inflation each year. Departments will have to provide evidence-based assessments for the continuation of programmes and projects. Treasury ultimately proposes a principles-based obligation to anchor fiscal sustainability in law, requiring each new government to table a plan to ensure that the fiscal position is sustainable throughout its term of office and that an appropriate fiscal metric is selected to measure compliance. This will build confidence and maintain the gains of fiscal consolidation without resorting to painful spending cuts or tax increases. Treasury aims to announce details of this fiscal anchor endeavour in the 2026 Medium Term Budget Policy Statement (MTBPS). DEBT FIGURES For the first time this decade, debt service costs will grow slower than government's overall expenditure. South Africa debt-to-GDP ratio is currently at 78% which is unsustainable but is at least the peak, according to Godongwana. The higher debt is attributed to weaker nominal GDP growth and increased borrowing in 2025/26. Government's interest on debt has grown faster than the economy and takes a larger slice of the Budget than basic education, health or social protection. "By sticking to a responsible plan, government is making the economy stronger for all South Africans," Godongwana said. He affirmed that South Africa's debt as a share of economic output would reach its highest point this year and then start to decline. The main budget deficit is R12.4-billion lower than forecasted at the time of the 2025 Budget as a result of strong fiscal outcomes for the first ten months of 2025/26. He expects the country's GDP to grow by 1.6% this year and by 2% in 2028. South Africa's debt service costs as a percentage of revenue will decrease from 21.3% in 2025/26 to 20.8% in 2026/27 and continue to decline to 20.6% and 20.2% by 2027/28 and 2028/29, respectively. Principal and interest payments are expected to be R21-billion lower than estimated in the 2025 MTBPS while revenue collections for 2025/26 are projected to be R28.8-billion higher than the 2025 Budget estimate. This means non-interest expenditure will increase by R22.1-billion and government will achieve a primary surplus of 0.9% of GDP. The consolidated budget deficit is expected to narrow from 4.5% of GDP in 2025/26 to 3.1% of GDP in 2028/29. Likewise, National Treasury predicts the main budget primary surplus will increase from 1.6% of GDP in 2026/27 to 2.3% of GDP in 2028/29. Debt service costs have been revised down by R10.6-billion over the medium term, driven by improved bond yields, an appreciating rand and lower inflation and interest rates. An estimated R12-billion of savings under the Targeted and Responsible Savings (TARS) initiative over the medium term can markedly improve service delivery. The TARS initiative was announced in the 2025 MTBPS as ...

    4 min

  2. 16H AGO

    Treasury expects healthy trade, investment conditions until at least 2028

    Treasury expects healthy trade, investment conditions until at least 2028 National Treasury expects demand from South Africa's major trading partners to tick up from an estimated 3.1% in 2025 to 3.3% in 2026, settling at 3.4% in 2027 and 2028. This trend is supported by strong investments in technology and accommodative fiscal and monetary policies, despite ongoing trade policy uncertainty globally. Global investor participation in the domestic bond market ticked up from 24.6% in 2024 to 25% in 2025, supported by lower risk aversion and improved perceptions of South Africa's credit outlook. In comparison, global trade demand growth is projected to reach 3.4% in 2028. The sovereign risk premium is expected to ease further in South Africa, supported by government's sustained commitment to a credible macroeconomic framework. Treasury explains in it 2026 Budget delivered on February 25 that South Africa's removal from the Financial Action Task Force grey list and the EU list of high-risk jurisdictions, together with a recent upgrade of the country's foreign currency sovereign credit rating, all bode well for investor confidence. TWO SCENARIOS Treasury outlines two scenarios to it baseline economic growth forecast for South Africa of between 1.6% and 1.9% from 2026 to 2028. In the global upside scenario, an improved global environment is driven by easing geopolitical tensions and more stable trade policies that reduce uncertainty, improve supply chains and boost productivity. With supply conditions improving, commodity markets can stabilise and oil prices are likely to remain slightly below baseline in the medium term. Earlier and more decisive monetary easing by major central banks, combined with lower global financial market volatility, strengthens investor appetite for emerging market assets, bolstering emerging market currencies. In turn, stronger global demand and reduced borrowing costs support exports and enhance financing conditions, raising domestic economic growth above the baseline. In this scenario, South Africa's economic growth is projected to average 1.9% from 2026 to 2028. On the other hand, the global downside scenario mulls the possibility of increased geopolitical tensions, further supply chain and critical infrastructure disruptions, as well as heightened uncertainty. These constraints could raise prices for key commodities, including crude oil and gas, while increasing demand for safe-haven assets such as gold. This in turn lifts global inflation, delaying monetary policy easing and weakening global growth. Simultaneously, financial market volatility increases, tightening financial conditions and reducing investors' appetite for risk. For South Africa, higher oil prices and a weaker exchange rate raise imported inflation, while elevated risk premiums lead to higher borrowing costs, delaying the domestic easing cycle and slowing consumption and investment. As a result, growth in this scenario averages 1.6% from 2026 to 2028. PROMINENT RISKS Some of the local risks to South Africa's trade landscape remain that of persistent logistics bottlenecks, weak public infrastructure and exposure to climate shocks. These continue to raise the cost of doing business and threaten production and investment prospects. In contrast, Treasury says faster structural reform implementation – particularly in energy and logistics – would boost potential growth. South Africa is making progress in becoming more trade and investment friendly. Since 2020, for example, government has expanded the use of concessional foreign funding with favourable terms from multilateral and development finance institutions, complemented by Eurobond issuance. In December last year, government successfully raised $3.5-billion in global markets through an oversubscribed transaction. Government has also introduced a formal process to attract new foreign-currency funding structures from financial institutions, as a result of which several transactions have b...

    4 min

  3. 16H AGO

    Treasury withdraws planned R20bn tax increase from 2026 Budget

    Treasury withdraws planned R20bn tax increase from 2026 Budget Finance Minister Enoch Godongwana announced during his 2026 Budget speech on February 25 that a R20-billion tax increase that was previously earmarked for the 2026 Budget has been withdrawn and personal income tax (PIT) brackets, as well as medical tax credits, will be fully adjusted for inflation after two years of no inflationary relief. Tax thresholds and limits will also be adjusted for the impact of inflation to assist small businesses and provide overall relief to taxpayers. Last year's Budget announced that R20-billion in tax increases would be proposed in the 2026 Budget to fund new and persistent spending pressures, however, revenue collection has been stronger than expected owing to steady economic growth and commodity price increases. Government's gross tax revenue for 2025/26 has been revised upwards by R21.3-billion compared with estimates in the 2025 Budget. The tax-to-GDP ratio increase by 25.9% in 2025/26 from 25.1% in 2024/25. Specific excise duties on alcoholic beverages and tobacco products will increase by 3.4% at the end of February. Excise tax on malt beer and ciders both will increase by 8c per 340 ml can, while unfortified wine excise duties will increase by 15c per 750 ml bottle. Excise tax for fortified wine will increase by 26c per 750 ml bottle and cigarettes will have an excise duty increase of 77c per packet of 20. The general fuel levy will increase to R4.10 per litre for petrol and R3.93 for diesel from April 1, while the Road Accident Fund levy will increase by 7c per litre to R2.25 per litre – both increases are in line with or less than inflation. The carbon tax already increased from R236/t of carbon dioxide equivalent to R308/t from January 1, while the carbon fuel levy will increase to 19c per litre for petrol and 23c per litre for diesel from April 1. This is also in line with inflation. Treasury may soon tax online gambling for the first time. After publishing a draft national online gambling tax discussion paper for public comment in November 2025, which proposed a tax of 20% on gross gambling revenue generated by online gambling, the public comment period was extended to February 27. Treasury will also host a workshop with those who submitted comments and include proposals in draft legislation format for another round of public comment later in the year. Godongwana emphasises that the capital gains tax exemption for the sale of a small business for older persons is being raised from R1.8-million to R2.7-million. This applies to small businesses worth R15-million instead of the R10-million previously. It will enable small business owners to receive more tax relief when they sell their businesses. Meanwhile, Godongwana expects that government will garner R844-billion in tax revenue from PIT in 2026/27, R521-billion from value-added tax (VAT), R364-billion from corporate income tax, R159-billion from customs and excise duties, R104-billion from fuel levies and R132-billion from other taxes. Effective April 1, the compulsory VAT registration threshold increases to R2.3-million; the turnover tax regime for microbusinesses is adjusted for inflation, with the restriction on tax year end dates removed; and tax-free investments' yearly limit increases from R36 000 to R46 000 to encourage savings. The 2026 Budget tax proposals raise no additional revenue over the medium-term, which means the medium-term tax revenue outlook has been revised down by R57-billion. Treasury explains improvements in several tax bases will partly offset the withdrawn R20-billion in tax increases and confirms that tax buoyancy remains strong. Treasury says despite challenging economic conditions, South Africa's tax system has performed well, with the tax-to-GDP ratio increasing from 25.1% in 2024/25 to 25.9% in 2025/26. The tax-to-GDP ratio is expected to reach 26.2% by 2028/29 as economic growth improves. In the first three quarters of 2025/26, South Afr...

    5 min

  4. 1D AGO

    MKP files court application to halt Batohi’s pension payments

    MKP files court application to halt Batohi's pension payments The uMkhonto weSizwe Party (MKP) has filed an urgent application to the court to stop former National Director of Public Prosecutions Advocate Shamila Batohi's pension payments and post-term gratuities benefits, until an inquiry is conducted. The matter will be heard on March 26 on an urgent basis. Last month the party approached the Presidency to withhold Batohi's pension benefits, pending the finalisation of issues arising from the Nkabinde Inquiry. Batohi vacated her office last month, as she reached the age of 65. The MKP is seeking an interdict to withhold Batohi's pension benefits, arguing that public funds could not lawfully be paid out while allegations of misconduct, dereliction of duty and possible perjury remained on record. "Allowing benefits to be paid under these circumstances would expose the State to irregular expenditure, undermine public confidence in the National Prosecuting Authority, and reward conduct that is fundamentally incompatible with constitutional standards of accountability and integrity," it argued. The party said the Nkabinde inquiry had already placed before the public prima facie evidence that raised concerns about Batohi's fitness for office, such as alleged contradictory testimony under oath and unresolved discrepancies between her version and documentary evidence. The inquiry is investigating whether Advocate Andrew Chauke, the Director of Public Prosecutions for the South Gauteng Division, is fit to continue to hold office. The party claimed that Batohi failed to handle and safeguard sensitive prosecutorial matters, and said her withdrawal from the inquiry proceedings was unlawful. The Nkabinde inquiry is expected to conclude by June 30, following President Cyril Ramaphosa's extension last month. The original date for the completion of the inquiry and submission of a final report was January 30, 2026. The MKP warned that if any funds have already been disbursed, it will pursue their full recovery. In its application, the party seeks an order that will compel Ramaphosa to establish a "proper inquiry" in terms of the applicable law. Last month, the party requested that Ramaphosa establish an inquiry to determine whether Batohi's alleged conduct disqualifies her from receiving her pension benefits or to ensure that any payment made is subject to the State's full right of recovery, and a formal undertaking that the funds will not be dissipated. The MKP wants the court to set aside any decision that authorised benefits without such an inquiry and declare any failure to institute the inquiry unlawful. It also wants the court to order repayment to the State of any money improperly paid.

    2 min

  5. 1D AGO

    Presidency assures NHI delay won't affect implementation timetable

    Presidency assures NHI delay won't affect implementation timetable The Presidency confirmed on Tuesday that following consultations with Health Minister Dr Aaron Motsoaledi, President Cyril Ramaphosa has officially agreed to delay the proclamation of any sections of the National Health Insurance (NHI) Act until the Constitutional Court has handed down its judgments in May. Further, it assured that the decision taken by Ramaphosa will not affect the timetable for the implementation of the NHI. This comes amid several legal actions from various civil society groups, arguing that the NHI Act is unconstitutional and irrational. Last week Ramaphosa confirmed that he would not promulgate any provisions of the NHI Act prior to the Constitutional Court handing down judgment on the public participation challenges, and that he would not enforce any part of the Act until he was requested to do so by the Minister of Health. The court cases relate to the public participation process that led to the adoption of the NHI Bill by Parliament, with arguments that they were not properly followed. The Department of Health (DoH) has indicated that preparatory work for the implementation of the NHI has been ongoing, such as the improvement of health services before any sections of the NHI Act are ready for commencement. Meanwhile, one of the litigators, Solidarity, has threatened legal action against government should it fail to comply with Tuesday's High Court order. Opponents to the NHI and government reached an agreement to cease legal action on condition that the implementation and further development of the NHI ceased immediately. "Any further implementation of the National Health Insurance Act (NHI) must now be stopped with immediate effect, following a court order. "No further budgetary concessions may now be granted in respect of the NHI," it said. Following the issuance of the court order, Solidarity has sent a letter of demand to Ramaphosa, the DoH, the National Treasury, and the relevant Ministers, warning them against any disregard of the NHI court order. Solidarity welcomed the provisional suspension of the NHI, saying the ruling is a major breakthrough in its opposition to the NHI. "…it is beyond comprehension that taxpayers' money is being used to establish a system that faces such extensive litigation," said economic researcher at the Solidarity Research Institute Theuns du Buisson. He claimed the NHI would never be realised, because it was simply "unworkable, unaffordable, and irrational". "It is deeply concerning that anyone could regard it as a sound policy, particularly given that billions of rands have already been spent on it. "Yet these billions of rands in costs would be only a fraction of the far greater sums and the irreversible loss of life were the NHI package to be implemented," he stated.

    2 min

  6. 1D AGO

    S African men lured into fighting in Russia make their way home

    S African men lured into fighting in Russia make their way home President Cyril Ramaphosa announced on Tuesday that 11 of the 17 South African men who were lured under false pretences into fighting in the conflict between Russia and Ukraine, will soon make their way home. The South African government said it has been working closely with the Russian government to secure the safe return of the men. Ramaphosa expressed "heartfelt gratitude" to Russian President Vladimir Putin for his assistance in the matter and reaffirmed South Africa's commitment to a peaceful resolution of the conflict through negotiation. Spokesperson to the President Vincent Magwenya said Putin pledged his support to the men returning home during a telephone call with Ramaphosa earlier this month. Last year, the Parliamentary Portfolio Committee on International Relations and Cooperation confirmed that 17 South Africans were stranded in the Donbas area after allegedly being lured to fight in the Ukraine-Russia conflict under false pretences. Media reports had indicated that the 17 men between the ages of 20 and 39 years were South Africans, mainly from KwaZulu-Natal, and were tricked into believing they were to receive "skills training" in Russia but ended up on the war front with Ukraine. The Hawks and the South African Police Service are investigating the recruitment process. Ramaphosa had received distressed calls for assistance from the 17 South African men. Four men arrived back in the country last week, while two remain in Russia; one is hospitalised in Moscow and the other is undergoing administrative travel processing. Meanwhile, the Democratic Alliance has laid criminal charges against uMkhonto we Sizwe Party (MKP) member Duduzile Zuma-Sambudla for the alleged mercenary recruitment. The investigation revolves around allegations of human trafficking, fraud, and violations of the Regulation of Foreign Military Assistance Act, which prohibits South African citizens from participating in foreign armed conflicts without government authorisation. Zuma-Sambudla and the MKP have since denied the allegations, claiming they were also victims of fraud by intermediaries.

    2 min

  7. 2D AGO

    Trump's new ambassador to South Africa presents credentials

    Trump's new ambassador to South Africa presents credentials US President Donald Trump's pick for ambassador to South Africa, conservative activist and writer Leo Brent Bozell III, on Monday presented his credentials to South Africa's government. South Africa's foreign affairs ministry said in a statement that Bozell had presented his letters of credence to Clayson Monyela, the deputy director-general. Bozell arrived in the country earlier this month, at a time of strained relations between Washington and Pretoria. Trump has accused South Africa of persecuting its white minority, criticised its ties with Russia and China, imposed steep tariffs on its exports and cut all aid. Pretoria strongly rejects claims that its white minority is persecuted. Bozell said in his Senate confirmation hearing in October that he would approach his ambassadorship "with respect for the South African people", and that he saw "real opportunity for a lasting partnership" despite areas of disagreement. South Africa has not had an ambassador in Washington since the Trump administration expelled its last one.

    1 min

  8. 2D AGO

    Ramaphosa defends SANDF deployment to fight organised crime

    Ramaphosa defends SANDF deployment to fight organised crime Government is working to close funding gaps and strengthen the readiness of the country's armed forces to assist the South Africa National Police Service (Saps) in fighting organised crime, according to President Cyril Ramaphosa. On Monday, in his weekly letter to the nation, Ramaphosa defended his decision to deploy the South African National Defence Force (SANDF), to support the Saps in tackling gang violence and illegal mining in the Western Cape, Gauteng and Eastern Cape. Ramaphosa wrote that given the country's history, where the apartheid State sent the army into townships to violently suppress opposition, it is important that the SANDF is not deployed inside the country to deal with domestic threats without good reason. He argued that the recent deployment is necessary owing to a surge in violent organised crime. Ramaphosa received criticism for this move, with some opposition parties claiming this is government's admission that it has failed to strengthen the Saps. Ramaphosa assured that the SANDF will be deployed in support of the Saps, operating under police command, with clear rules of engagement and for specific time-limited objectives. "The SANDF may, for example, be called on by the police to provide protection in high-risk operations, or to support cordon-and-search operations against armed criminals. Soldiers may also help to secure critical infrastructure, freeing Saps members to focus on investigations, arrests and building cases that lead to successful prosecutions," he explained. He pointed out that the deployment of the SANDF will take place alongside other measures, such as strengthening anti-gang units and illegal mining tasks teams. Police will also collaborate with the National Prosecuting Authority on multi-disciplinary task teams to target the leadership, finances, firearms and logistics of criminal networks. On Saturday Ramaphosa officiated the Armed Forces Day commemoration in Limpopo. He said in an era defined by increased geopolitical tensions, the country's armed forces safeguard sovereignty and promote peace and stability beyond the country's borders. "They also have an important role inside the country," he added. He highlighted that this is not the first time that the SANDF has been deployed domestically, noting disaster response and development support. He said during the recent floods in parts of Limpopo and Mpumalanga, the SANDF supported relief efforts and assisted with evacuations, repairing damaged infrastructure and erecting temporary structures. "Through Project Owethu, which was launched in Limpopo to coincide with Armed Forces Day, the SANDF provided healthcare services to more than 50 000 people in underserved communities," he explained. He pointed to the unprecedented mobilisation of the SANDF during the Covid-19 pandemic, which he said enabled government to enforce disaster regulations, safeguard the borders, support anti-crime efforts with the Saps and set up field hospitals to tend to the sick. Meanwhile, he said government is also strengthening the complement of younger people in the SANDF. He explained that applications recently opened for the 2027 Military Skills Development System, which offers young people the opportunity to gain skills and training in the army, air force, navy and military health service.

    3 min
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Polity.org.za offers a unique take on news, with a focus on political, legal, economic and social issues in South Africa and Africa, as well as international affairs. Now you can listen to the top three articles on Polity at the end of each day.

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