South Africa sees debt stabilising, lifts security spending in new budget

2026-02-25 - 22:33

South African finance minister Enoch Godongwana said the government would step up spending on security, as authorities tackle rampant violent crime. (EPA Images pic) CAPE TOWN: South Africa’s finance minister on Wednesday said the country’s debt burden is stabilising for the first time in nearly two decades, as the economy shows cautious signs of recovery. The government plans to spend 2.67 trillion rand (US$168 billion) in the 2026/27 financial year, including a targeted push to tackle crime following President Cyril Ramaphosa’s decision to deploy the army to dangerous areas, minister Enoch Godongwana said. “For the first time in 17 years, debt will stabilise and it will continue to fall in the coming years,” Godongwana told parliament in his budget speech. Africa’s most developed economy has struggled with stubbornly high debt, which hit a record high of nearly 80% of GDP. It is expected to ease to 77.3% in 2026/27 and decline further to 76.5% the following year, Godongwana said. In November, South Africa secured its first major credit upgrade in over 16 years after S&P Global lifted the country’s sovereign assessment. It had also been removed a month earlier from the global money-laundering watchdog’s “grey list” of countries under increased monitoring. “These are signals of restored credibility, of renewed resilience and of a nation regaining its footing,” Godongwana said, projecting growth of 1.6% in 2026. With fiscal pressures easing, the minister said the government would also step up spending on security, a priority as authorities confront persistently high levels of violent crime. Spending on peace and security would increase to 291.2 billion rand (US$18 billion) by 2028, Godongwana said, in part to fund the deployment of army units alongside police in crime hotspots. The measure announced by President Cyril Ramaphosa earlier this month was the latest in a series of tough moves by the government to contain rampant crime in the country with one of the world’s highest murder rates, averaging about 60 killings a day.