If South Africa is to break its entrenched low-growth economic cycle, Finance Minister Enoch Godongwana needs to set a bold new course for the country when he delivers the national budget in February 2026.
The minister’s business-like approach and his team’s successes, such as the South African Revenue Service’s (SARS’s) impressive performance in recent years and the progress in resolving energy sector blockages, is commended. But to kickstart economic growth, we must move beyond simply making marginal changes and adopt bold policies that actively promote growth.
The minister’s speech provided a detailed report-back on key aspects of our economy, such as public-private partnerships (PPPs) being implemented to unlock blockages in network industries being addressed. The past initiatives taken through the Presidency’s Operation Vulindlela are acknowledged, but it’s time we pinpoint the crucial policy shifts that could genuinely spark the vigorous economic growth that South Africa needs.
If we want growth, we must intentionally adopt a bullish approach, and acknowledge that the bulk of this growth will come from within local government jurisdictions. Economic growth cannot happen by default; it must be achieved by design. South Africa Inc. must set aside money in the budget to buy economic growth! The money must be directed towards the industrialisation and resuscitation of network industries – water, electricity, logistics and transport – that directly catalyse economic growth and job creation.
The national government allocates around 9.7% of its budget to municipalities that often lack the industrial base to generate significant revenue to make up the shortfall and, crucially, struggle to attract the requisite technical and financial skills because their pay scales cannot compete with urban centres.
The consequences are there for all to see – water treatment plants not working optimally, affecting water quality; pot holes on the roads; streets that don’t work and so on. Without addressing the fundamental resource allocation model, perhaps by audaciously allocating a more realistic 30 cents of every rand, translating to 30% of the national budget, we cannot expect local government to professionalise, retain talent and follow long-term strategies that take communities beyond the five-year integrated development plans. We need to support the
creation of centres of excellence in key areas such as project management and revenue collection within local government to systematically drive results. This should have been Godongwana’s first policy shift.
The promised revision of the PPP framework is essential for mobilising private capital, particularly at the local government level. The National Treasury must finalise the long overdue local government PPP framework into a formal policy statement, to unlock the mobilisation of private sector capital to deploy in municipal infrastructure development. It is vital to revitalise municipal service delivery through refurbishing old infrastructure and constructing new infrastructure.
The unemployment figures have reduced marginally from 33.2% in the second quarter of 2025 to 33.1% in the third quarter, according to Statistics South Africa. This cannot be celebrated at all. South Africa Inc. must take another bold policy shift to redirect the funds that were allocated to the Social Relief of Distress (SRD) grant to recapitalise the development finance institutions such as National Economic Fund, Small Enterprise Development and Finance Agency (SEDFA) and others to extend grants and business finance.
South Africa must adopt a resolute policy position that views itself as a supplier to Africa, our continent, over and above trading with other countries or regions. This means aligning our trade and economic policies with those of our African peers and finding complementarity – where one country installs renewables, another manufactures the components and a third supplies the minerals to manufacture components.
We must leverage our capabilities to provide simple, basic goods such as toothpicks and
other basic bread-and-butter items that African nations currently import from outside the continent. The African Continental Free Trade Area (AfCFTA), which is massive – provides a doorway to a single market offering more than 1.3-billion people. This market, according to the World Bank’s 2020 estimate, offers a combined GDP of approximately $3.4-trillion.
The success at SARS and the financial turnaround at Eskom offer a clear template: institutions thrive when they adopt entrepreneurial, data-driven strategies backed by clean governance and a deliberate rebuilding exercise. We must apply this model to Transnet, the Passenger Rail Agency of South Africa and every other state-owned entity. The removal of South Africa
from the grey listing by the Financial Action Task Force is also a welcome win and will reduce the cost of borrowing.
Ultimately, the February budget must look to vigorously boost the South African economy
at a structural level. We need bold numerical commitments to network services, a complete overhaul of the local government funding model and policies that explicitly target reindustrialisation and aggressive continental trade.
The time for conservative action is over. We need a budget that shows we are actively buying the future we want.
