By Tarryn-Leigh Solomons
Finance Minister Enoch Godongwana’s latest budget outlines a bold framework to stabilise South Africa’s public services, step up the fight against corruption, and stimulate economic recovery. The minister acknowledged that deep-rooted governance and service delivery issues remain major obstacles to growth and investor confidence.
Addressing the National Assembly on Wednesday, 21 May, Godongwana spoke frankly about the state of public services, reaffirming government’s commitment to “restore critical frontline services and invest in infrastructure” to expand access and improve economic outcomes.
Quoting an open letter from UCT medical student Sarah Stein, Godongwana illustrated the dire conditions within the public health system:
“Working in a public hospital with way too few resources punches you in the gut every day… no gloves in a delivery room; no alcohol swabs to clean wounds; and knowing that nurses stop at the shop on their way to work to buy their own gloves and masks because the clinic has run out.”
The Minister said this budget “aims to address” such entrenched problems, showing that health and social services remain a government priority, even under financial strain.
Budget allocations: Priorities include health, education, and social relief
Non-interest expenditure will total R6.69 trillion over the medium term, with an additional R180.1 billion allocated – down from R232.6 billion in March – signalling a continued cautious approach.
Key allocations include:
- Provincial education: R1.04 trillion over the medium term, with R9.5 billion added to retain teachers and recruit more staff. Early childhood development will receive increased support, with subsidies rising from R17 to R24 per child per day, reaching 700 000 more children.
- Provincial health: R845 billion is set aside, with a further R20.8 billion over three years to hire 800 doctors completing community service and ease staffing budget pressures.
- Social grants: The old age grant will rise by R120 to R2 310 from April 2025, and by a further R10 in October. The COVID-19 Social Relief of Distress grant has been extended until March 2026, with discussions underway to link it to employment initiatives, such as a possible job-seeker allowance.
Godongwana said these allocations are intended “not only to provide immediate relief but to open up employment pathways and empower people to shape their own futures.”
Infrastructure: Fuel for growth and jobs
The minister reaffirmed infrastructure investment as central to South Africa’s growth strategy, with public infrastructure spending projected to exceed R1 trillion over the next three years. Priority areas include transport and logistics (R402 billion), energy (R219.2 billion), and water and sanitation (R156.3 billion).
Notable allocations include:
- R93.1 billion for SANRAL to maintain the national road network.
- R66.3 billion for PRASA to overhaul its commuter rail services, aiming to triple annual passenger journeys to 186 million by 2027/28.
- Energy sector spending to stabilise the power supply by integrating renewable energy and expanding the grid.
“This budget reflects our determination to shift spending away from consumption and towards investment,” said Godongwana, stressing infrastructure’s potential to create jobs “across a range of skill levels.”
Improving efficiency and fighting corruption
The Minister called for stricter financial discipline following a decade of economic underperformance. Since 2013, National Treasury has reviewed public expenditure to identify R37.5 billion in potential savings by cutting waste and duplication.
He warned that ineffective programmes “will be discontinued” as part of a redesigned 2026 MTEF budget process, with a stronger emphasis on infrastructure planning and the use of data to spot irregularities in payroll systems.
Godongwana noted that the President would establish a joint committee between the Presidency and Treasury to monitor wasteful and underperforming programmes. “We need full support from all government officials to protect public resources,” he said.
On corruption, he highlighted that the National Prosecuting Authority’s Asset Forfeiture Unit has recovered more than R5 billion in the past five years, including R8 billion linked to state capture. This, he said, underlines the state’s commitment to rooting out corruption.
Municipal finance and service delivery
Over the medium term, R2.4 trillion will go to provinces and R552.7 billion to municipalities, helping to provide free basic services to 11.2 million low-income households. This, Godongwana said, remains “a key tool for reducing poverty and inequality.”
However, he cautioned that “sustainable local government finance depends not just on enforcement, but on genuinely delivering value to communities.” He urged municipalities to recognise that reliable service delivery is essential to their financial sustainability.
Public-private partnerships and alternative funding models
New PPP regulations, set to take effect next month, aim to speed up infrastructure projects by making it easier to structure deals with the private sector. The Treasury has also issued guidelines to manage unsolicited bids and fiscal risks and is consulting the market on major rail and port projects.
Godongwana confirmed that South Africa’s first infrastructure bond would be launched in 2025/26, and said government is exploring ways to involve pension funds and international financiers in long-term investment.
Despite ongoing fiscal pressures, Godongwana’s budget strikes a careful balance between stabilising public finances and investing in sectors critical to the country’s recovery.
