BUSA welcomes 2026 Budget’s fiscal prudence and reform momentum
Business Unity South Africa (BUSA) welcomes the 2026 Budget tabled by Minister of Finance Enoch Godongwana in Parliament on 25 February 2026, noting its clear acknowledgement of South Africa’s central challenge: too little growth, which entrenches unemployment and inequality.
BUSA welcomes the Budget’s focus on prudent fiscal management and the stewardship of public finances. “The Budget highlights important progress, including South Africa’s removal from the FATF grey list, a credit rating upgrade, the stabilisation of debt, a narrowing budget deficit and easing borrowing costs,” said BUSA CEO Khulekani Mathe.
“These developments are worthy of recognition because they demonstrate what is achievable when the country concentrates on the right priorities and works together. The removal from the FATF grey list, in particular, required coordinated efforts across government departments and agencies, as well as the private sector.”BUSA notes the GDP growth forecast of 1.6 per cent in 2026, rising to 2.0 per cent by 2028. While this indicates improvement and suggests that South Africa is beginning to turn the corner, BUSA remains concerned that the growth rate is still too modest to meaningfully address unemployment at scale.
Building on these positive developments to raise the growth rate must now be the focus of all our efforts. Sustained improvement will strengthen investor confidence, which is essential to unlock higher growth and job creation.
BUSA commends the Minister for a Budget that contains no surprises, particularly regarding tax policy, while reflecting significant gains from improved tax administration and expenditure reviews. These gains have ensured that the R20-billion funding gap anticipated for the 2026/27 fiscal year will be covered without the need for tax increases, as previously announced.
He said Business also welcomed additional tax measures to ease the financial burden on businesses and households. These include adjusting personal income tax brackets for inflation, increasing the VAT registration threshold, and raising the capital gains exemption for the sale of small businesses.
“The four features of National Treasury’s fiscal strategy, namely supporting economic growth, improving the efficiency of public spending, enhancing the composition of spending by containing the public service wage bill while increasing capital investment, and entrenching sustainable public finances with a principles-led fiscal anchor, are yielding positive results,” said Mathe.
However, BUSA cautions that the country’s progress will be constrained unless service delivery at local government level improves materially. The failure of some municipalities to fulfil basic service delivery functions continues to impose direct costs on households and businesses.
Mathe said: “Dry taps, potholes, sewage running through the streets and non-functional traffic lights have become daily occurrences that erode confidence and undermine the positive narrative of a country on the mend. BUSA is concerned that the measures announced do not go far enough to address this rapidly deteriorating situation.”
BUSA notes that the Minister announced allocations for many of the priorities outlined in the President’s State of the Nation Address, including increased funding for early childhood development, deploying the army to combat organised crime and gangsterism, employing more doctors and investing in infrastructure.
This alignment between the State of the Nation Address and the Budget reflects improved coordination within government and bodes well for effective implementation. The government must now demonstrate its capacity to deliver on these commitments through decisive action.
BUSA also acknowledges the progress achieved in areas where stronger collaboration between government and business has been established. Government’s commitment to structural reforms in energy, transport, and logistics, under the auspices of Operation Vulindlela, aims to increase competition in these sectors. Private-sector participation, coupled with public-private partnerships currently under development, is essential to unlocking the growth potential of the South African economy.
“Business stands ready to support measures aimed at growing the economy, boosting investment and accelerating job creation,” Mathe concluded.
ENDS
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