{"id":880818,"date":"2026-10-21T15:34:43","date_gmt":"2026-10-21T13:34:43","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=880818"},"modified":"2026-10-21T15:34:47","modified_gmt":"2026-10-21T13:34:47","slug":"south-africa-unveils-new-fiscal-anchor","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/880818\/south-africa-unveils-new-fiscal-anchor\/","title":{"rendered":"South Africa unveils new fiscal anchor"},"content":{"rendered":"\n

South African bonds rallied as the government cut weekly issuance and Finance Minister Enoch Godongwana unveiled new rules to ensure fiscal sustainability as debt peaked.<\/p>\n\n\n\n

Godongwana confirmed debt as a percentage of gross domestic product topped out at 78.4% in 2025-26, a slightly lower level than anticipated in February\u2019s budget, and is seen declining in the years ahead.<\/p>\n\n\n\n

\u201cSouth Africa has emerged from the fiscal wilderness,\u201d he said in the introduction to the medium-term budget policy statement that he presented in Cape Town on Wednesday. <\/p>\n\n\n\n

\u201cGovernment is meeting its fiscal targets and restoring the public finances to good health.\u201d<\/p>\n\n\n\n

The yield on South Africa\u2019s 10-year government bonds fell 12 basis points to 8.84%, the lowest in more than a month, while the rand reversed an earlier decline to trade 0.1% stronger at 16.37 per dollar by 2:45 p.m. in Johannesburg.<\/p>\n\n\n\n

\u201cTreasury has cut weekly issuance by far more than the market expected, thanks to strong revenues and a change in the funding mix, and it has also included bond buybacks,\u201d Adam Furlan, a portfolio manager at Ninety One SA, said. <\/p>\n\n\n\n

\u201cAll in all, this is a good, bond-friendly budget. It confirms that debt-to-GDP has peaked and will fall gradually, and rating agencies should receive it well.\u201d<\/p>\n\n\n\n

The consolidated budget deficit is seen narrowing to 3.9% in the year through March from 4% previously forecast. <\/p>\n\n\n\n

Treasury also projected the primary budget surplus, or revenue minus non-interest spending, growing for a fourth consecutive year to 1.7% of GDP from 1% in 2025-26.<\/p>\n\n\n\n

To safeguard these gains, the government released draft fiscal anchor legislation for public comment, expected to be tabled in parliament next year, Godongwana said in his speech to lawmakers.<\/p>\n\n\n\n

It foresees a principles-based fiscal rule focused on sustainability, with each new administration required to outline targets that are subject to oversight by parliament.<\/p>\n\n\n\n

\u201cThe fiscal anchor forms part of the most extensive reconfiguration of the public finance system since 1999, in line with broader efforts to strengthen state capability,\u201d the National Treasury said in budget documents.<\/p>\n\n\n\n

A strong performance<\/h2>\n\n\n\n
\"\"<\/a>
Finance Minister Enoch Godongwana.<\/figcaption><\/figure>\n\n\n\n

The revamp could boost market sentiment. South Africa\u2019s bonds have outperformed peers in recent months.<\/p>\n\n\n\n

\u201cMarkets will be encouraged to see South Africa with a stronger balance sheet and a firm grip on debt,\u201d said Karim Noujaim, Founder and Managing Director of Skykapital. <\/p>\n\n\n\n

\u201cThe country\u2019s investment case is stronger than it has been for some time.\u201d<\/p>\n\n\n\n

Treasury expects to collect R17.1 billion more in taxes than anticipated in its February budget, helped by stronger mining receipts.<\/p>\n\n\n\n

Godongwana\u2019s budget marks significant progress since he took over as finance minister in 2021, with the country\u2019s finances in a perilous state following the pandemic and years of mismanagement during former President Jacob Zuma\u2019s scandal-marred leadership.<\/p>\n\n\n\n

The minister was quick to point out that the improved outlook was achieved despite economic headwinds, including surging energy prices due to the Iran war.<\/p>\n\n\n\n

The Treasury revised its 2026 growth forecast to 1.2%, down from a projected 1.6% estimate in February.<\/p>\n\n\n\n

Godongwana announced temporary relief for motorists and commuters, reducing the fuel levy by 3 rand per litre for diesel and 1.50 rand for gasoline from 4 November to 1 December.<\/p>\n\n\n\n

Future interventions would have to remain fiscally neutral to prioritise fiscal targets over relief, said Duncan Pieterse, director-general at the Treasury. <\/p>\n\n\n\n

The government previously allocated more than R17 billion for similar relief.<\/p>\n\n\n\n

South Africa increased its borrowing requirement in the current fiscal year by R54.3 billion compared with the February projection, mainly to finance a domestic buyback program designed to smooth out redemptions.<\/p>\n\n\n\n

The National Treasury expects total borrowing to reach R443.2 billion in 2026-27, compared to R 380 billion projected in February.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa has unveiled a proposal for a new fiscal anchor as the country continues to improve its debt position.<\/p>\n","protected":false},"author":59,"featured_media":812934,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2112900479323697364","_sma_facebook_post_id":"191437357620492_2244441123042953","_sma_instagram_post_id":"17904517359667348","_sma_x_attempts":1,"footnotes":""},"categories":[13716],"tags":[17448,26879,9194],"class_list":["post-880818","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-enoch-godongwana","tag-fiscal-anchor","tag-mtbps"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/880818","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\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=880818"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/880818\/revisions"}],"predecessor-version":[{"id":880824,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/880818\/revisions\/880824"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/812934"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=880818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=880818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=880818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}