The 2026 Budget reflects improved fiscal discipline and a recognition that infrastructure and structural reform are central to unlocking growth, writes Ebrahim Patel.
Image: ChatGPT
THE Minara Chamber of Commerce notes positively the presentation of the 2026 National Budget by Finance Minister Enoch Godongwana and commends the government’s ongoing commitment to fiscal stabilisation, infrastructure development, and structural reform. These priorities are integral to fostering sustainable economic growth and enhancing South Africa’s global competitiveness.
The 2026 Budget reflects improved fiscal discipline and a recognition that infrastructure and structural reform are central to unlocking growth. The budget deficit - the difference between government revenue and spending - has narrowed, and debt-service costs are also falling. Borrowing will decrease from the R530 billion in 2025 to R380 billion in 2026 but government will still have to spend R432.4-billion on debt repayments and interest.
The stabilisation of public debt at 78.9% of GDP and the projected narrowing of the budget deficit over the medium term represent an important milestone in restoring macroeconomic credibility. These outcomes, together with South Africa’s removal from the FATF grey list and improved sovereign outlook, strengthen the country’s investment case.
The chamber welcomes the withdrawal of the R20 billion in tax increases, which were provisionally included in the 2025 Budget, thanks to higher than expected revenue of R21,3 billion in 2025. This, together with the inflationary adjustment of personal income tax brackets, will protect disposable income and support consumer demand.
The Minara Chamber of Commerce, in collaboration with other professional organisations, submitted a formal proposal to the minister advocating for an increase in the VAT registration threshold. The minister has responded positively by announcing the threshold’s increase from R1 million to R2.3 million. This adjustment, together with enhanced capital gains tax relief for small business disposals, constitutes significant support for SMMEs and contributes to the reduction of administrative burdens.
However, inflation-linked increases in fuel levies and excise duties will add incremental cost pressures, particularly in logistics, manufacturing, and consumer-facing sectors.
The commitment of more than R1 trillion in public infrastructure investment over the medium term is a positive and necessary intervention which will stimulate the economy. Business has consistently identified logistics inefficiencies, energy constraints, and water infrastructure backlogs as binding constraints to growth.
Planned investments in rail corridor recovery, transmission expansion, bulk water schemes, and road maintenance are aligned with these priorities. The revitalisation of Public-Private Partnerships and progress toward operationalising the Credit Guarantee Vehicle for transmission infrastructure signal a more pragmatic approach to accessing private-sector capital.
The introduction of performance-linked reforms for metro trading services and the ring-fencing of utility revenues are necessary steps toward restoring municipal financial integrity. Reliable electricity and water services remain foundational to business continuity and investment confidence.
The R1,17 trillion spending on education, healthcare, and social protection supports long-term productivity and social stability. The chamber is pleased to note the proposed reform of the skills ecosystem and the introduction of dual-training models aligned with industry demand to address structural unemployment.
While the chamber recognises the positives of the Budget tabled, the immediate priority must be effective implementation. Credible execution will determine whether this Budget translates into measurable economic impact.
The Minara Chamber of Commerce encourages continued public-private collaboration and accelerated reform implementation to ensure that fiscal consolidation translates into tangible economic opportunity and inclusive growth.
Ebrahim Patel, President of Minara Chamber of Commerce
** The views expressed do not necessarily reflect the views of IOL or Independent Media.