Godongwana faces tough task ahead to fund SONA promises amid a constrained fiscus

Finance Minister Enoch Godongwana will table the National Budget Review next week Wednesday in Parliament. Finance MinisterEnoch Godongwanafaces one of the most delicate balancing acts of his tenure when he tables the National Budget Review next week Wednesday, tasked with funding an ambitious slate of commitments announced by PresidentCyril Ramaphosawhile safeguarding afiscusthat remains structurally constrained. In hisState of the Nation Addresslast week, Ramaphosa pledged a sweeping package of interventions aimed at improving service delivery and restoring confidence in a crucial year for local government.

These include deploying 10,000 additional labour inspectors to curb business non-compliance, allocating R2.5 billion to support small and medium-sized enterprises (SMEs), mobilising more thanR1 trillion in infrastructure investmentover three years, addressing collapsing municipal water systems, strengthening intelligence coordination to tackle organised crime, and deploying the military to assist police in gang-affected areas. While the policy intent has been broadly welcomed, economists caution that ambition must be matched by crediblefiscal execution. Speaking at theNorth West University Business School Pitso 2026 on Monday,Sanisha Packirisamy, chief economist at Momentum Investments, noted that thefiscal backdrophas improved modestly in recent months, largely due to favourable commodity prices.

North West University Business School Pitso 2026 on Monday, Packirisamy said these dynamics could produce better-than-expected revenue outcomes in the short term, but warned that this remains cyclical relief rather than structural repair. “We are sitting with a still constrained fiscus.I would say that the fiscal dynamics have turned a bit more favourably in the last couple of months.South Africa has been gifted once again with the commodity price of windfall,” she said. I would say that the fiscal dynamics have turned a bit more favourably in the last couple of months.

[paywall]

South Africa has been gifted once again with the commodity price of windfall,” she said. “But it’s really not enough for this very long list of competing prioritieson the social front for South Africa.The key really is to start including the private sector. Through reform measuressuch as Operation Vulindlela, which really focuses on the network industriesby liberalising some of these sectors,that’s really how we are going to anchor a higher growth ratein order to meet some of those socio-economic demands.” “But it’s really not enough for this very long list of competing priorities

[/paywall]