Godongwana says growth not possible without fiscal discipline
Finance Minister Enoch Godongwana says South Africa’s 2026 National Budget is anchored on fiscal stability, structural reform, infrastructure investment and stronger state capacity.
He has described the approach as essential to restoring growth and safeguarding economic sovereignty.
Godongwana spoke at a government-led post-budget breakfast hosted in partnership with Brand South Africa and the Government Communication and Information System in Cape Town, where he outlined the policy direction underpinning the fiscal framework on Thursday.
He told business leaders, investors and public sector representatives that macroeconomic stability remains the foundation of the country’s recovery strategy, particularly as the government works to stabilise public debt and rebuild confidence in state finances.
Godongwana said fiscal discipline is not a substitute for growth, but a necessary condition for it.
"Macroeconomic stability is a necessary condition for growth… it may not be sufficient, but it is necessary."
Structural reforms framed as economic safeguard
The finance minister defended the government’s structural reform agenda, saying policy changes in energy and other sectors are intended to unlock growth while preventing long-term fiscal deterioration.
He cautioned that failure to act decisively could expose South Africa to external financial pressures.
"When you sit in my position and look at the numbers, you ask yourself — should we allow a situation where we lose sovereignty and go cap in hand to the IMF?"
He said reforms aimed at improving electricity supply and strengthening institutional performance are designed to support investment, boost productivity and enhance economic resilience.
Infrastructure positioned as growth catalyst
Godongwana described infrastructure investment as a central lever for economic expansion, noting that capital spending is intended to improve service delivery while stimulating employment and private sector participation.
He said infrastructure development has become embedded within Treasury’s long-term economic strategy.
"Infrastructure is a key stimulus to growth… it is central to the message we are talking about."
The minister added that improved infrastructure delivery is expected to support broader structural reforms and enhance the country’s competitiveness.
Concerns over municipal governance
Godongwana also highlighted governance challenges at a municipal level, warning that inefficiencies in public spending continue to undermine service delivery and weaken economic performance.
He said revenue collected for basic services does not always translate into maintenance or infrastructure investment, pointing to systemic weaknesses in public administration.
"If you pay for water, it does not mean that money goes to maintain water services… that is dysfunctionality."
He stressed that strengthening state capacity — particularly within municipalities — is critical to ensuring that fiscal measures translate into tangible improvements for citizens.
Budget framed as recovery framework
Godongwana told delegates the national budget should not be viewed as a single instrument capable of resolving all economic challenges, but rather as a framework supporting long-term reform and recovery.
He said the government’s approach is focused on stabilising public finances, accelerating structural reforms, investing in infrastructure and improving institutional effectiveness to support inclusive growth.
The minister added that progress in these four areas will determine the country’s economic trajectory in the coming years.
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