{"id":843569,"date":"2025-11-18T13:30:00","date_gmt":"2025-11-18T11:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=843569"},"modified":"2025-11-18T13:13:51","modified_gmt":"2025-11-18T11:13:51","slug":"south-africa-at-an-important-turning-point","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/843569\/south-africa-at-an-important-turning-point\/","title":{"rendered":"South Africa at an important turning point"},"content":{"rendered":"\n

Political and economic expert Dr Frans Cronje says South Africa is at an important turning point and that there are many positive signs in the economy.<\/p>\n\n\n\n

Cronje shared his views about South Africa\u2019s economic policies during a discussion with Mike Sham on the State of the Nation podcast<\/a>.<\/p>\n\n\n\n

He described Finance Minister Enoch Godongwana\u2019s 2025 Medium-Term Budget Policy Statement as very positive.<\/p>\n\n\n\n

He said that the budget policy statement indicates that South Africa\u2019s fiscal position is well under control.<\/p>\n\n\n\n

However, Cronje noted that the budget deficit is significantly higher than economic growth and that debt levels are much too high.<\/p>\n\n\n\n

Despite this, there are positive developments. South Africa has run a primary budget surplus (before interest payments) for many years.<\/p>\n\n\n\n

\u201cThis means if you can sort out the debt, the country has more than enough money to run its operations,\u201d he said.<\/p>\n\n\n\n

\u201cAnother positive is that the minister could credibly say that the debt curve in South Africa has peaked.\u201d

Godongwana said in his mid-term budget that South Africa\u2019s debt-to-gross domestic product ratio will stabilise at 77.9% in the current fiscal year.<\/p>\n\n\n\n

\u201cThis is the first time since the 2008 financial crisis that public debt will not grow as a percentage of GDP,\u201d he said.<\/p>\n\n\n\n

He explained that spending has consistently exceeded revenue since 2008. This drove up debt and debt-service costs.<\/p>\n\n\n\n

The debt servicing costs are now so high that the government has had to cut spending on essential services, such as education and security.<\/p>\n\n\n\n

However, the good news is that South Africa is turning the situation around, which will put the country on a much better trajectory.<\/p>\n\n\n\n

Another positive sign, Cronje said, was that Godongwana\u2019s speech also contained a strong political statement.<\/p>\n\n\n\n

\u201cIt was the strongest political statement to date about the long-term sustainability of the government of national unity (GNU),\u201d he said.<\/p>\n\n\n\n

S&P Global upgrades South Africa’s credit rating<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Cronje\u2019s view that South Africa is at an important turning point was confirmed by S&P Global\u2019s decision to upgrade its credit rating for the first time in 20 years.<\/p>\n\n\n\n

On Friday, 14 November 2025, S&P Global raised South Africa\u2019s foreign currency rating to BB and its local currency rating to BB+, with a positive outlook.<\/p>\n\n\n\n

The ratings agency said it expects South Africa\u2019s real GDP (gross domestic product) growth to rise to 1.1% in 2025.<\/p>\n\n\n\n

It further expects the country\u2019s economic growth to average 1.5% between 2026 and 2028, as reforms to the electricity sector and other key areas support growth.<\/p>\n\n\n\n

In the first half of the financial year ending March 31, 2026, South Africa\u2019s fiscal revenue outperformed budgeted targets.<\/p>\n\n\n\n

\u201cWe expect the government to post its third successive year of primary surpluses,\u201d S&P Global said in a statement.<\/p>\n\n\n\n

\u201cGiven improving tax collections and expenditure constraints, we expect fiscal consolidation to continue through to fiscal 2028.\u201d<\/p>\n\n\n\n

It added that contingent liabilities will ease as state-owned enterprises (SOEs) are likely to require less financial support in the future.<\/p>\n\n\n\n

Given these factors, it upgraded South Africa\u2019s foreign and local currency long-term sovereign credit ratings with a positive outlook.<\/p>\n\n\n\n

The positive outlook reflects the potential for further improvements in fiscal metrics and stabilisation of government debt.<\/p>\n\n\n\n

This positive outlook is contingent on South Africa\u2019s coalition government continuing its fiscal consolidation.<\/p>\n\n\n\n

\u201cThe outlook also reflects the possibility of stronger growth than we currently expect, despite trade- and tariff-related headwinds,\u201d it said.<\/p>\n\n\n\n

It said this growth relies on the authorities accelerating economic reforms while addressing infrastructure pressures.<\/p>\n","protected":false},"excerpt":{"rendered":"

Political and economic expert Dr Frans Cronje said South Africa is at an important turning point and that there are many positive signs in the economy.<\/p>\n","protected":false},"author":10,"featured_media":840203,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[24150,21799,21863,11765],"class_list":["post-843569","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-2025-medium-term-budget-policy-statement","tag-finance-minister-enoch-godongwana","tag-frans-cronje","tag-sp-global"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=843569"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843569\/revisions"}],"predecessor-version":[{"id":843596,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843569\/revisions\/843596"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/840203"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=843569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=843569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=843569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}