Business Unity South Africa (BUSA) has welcomed the 2026 National Budget, noting its clear acknowledgement of South Africa’s central economic challenge, including insufficient growth, which continues to entrench unemployment and inequality.
Reacting to the 2026 Budget Speech tabled by Finance Minister Enoch Godongwana in Parliament on Wednesday, BUSA commended the budget’s focus on prudent fiscal management and responsible stewardship of public finances.
READ | Finance Minister Enoch Godongwana: 2026 Budget Speech
BUSA CEO Khulekani Mathe highlighted several key milestones achieved over the past year, including South Africa’s removal from the Financial Action Task Force (FATF) grey list, a credit rating upgrade, debt stabilisation, a narrowing budget deficit and easing borrowing costs.
“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,” Mathe said.
The organisation noted that public debt is stabilising, while fiscal consolidation efforts have begun to yield measurable improvements in market confidence.
Mathe pointed to the Gross Domestic Product (GDP) growth forecast of 1.6% in 2026, rising to 2.0% by 2028.
While the projected improvement suggests that South Africa’s economy 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,” Mathe said.
BUSA also commended Godongwana for a budget that contains no surprises, particularly regarding tax policy, while reflecting significant gains from improved tax administration and expenditure reviews.
Improved tax administration and expenditure reviews have generated sufficient gains to close the R20 billion funding gap anticipated for the 2026/27 fiscal year without the need for additional tax hikes.
The organisation further welcomed additional tax measures aimed at easing the financial burden on businesses and households, including adjustments to personal income tax brackets, an increase in the VAT registration threshold, and raising capital gains tax exemption for the sale of small businesses.
Mathe said 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.
Local government failures a major constraint
Despite the positive fiscal outlook, BUSA warned that the country’s progress will be constrained, unless service delivery at local government level improves materially.
It noted that failure of some municipalities to fulfil basic service delivery functions, continues to impose direct costs on households and businesses.
“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,” Mathe said.
BUSA noted that the budget includes allocations aligned with priorities outlined in the President’s State of the Nation Address (SONA), including increased funding for early childhood development, the deployment of the army to combat organised crime and gangsterism, the employment of additional doctors, and infrastructure investment.
According to the organisation, this alignment reflects improved coordination within government and bodes well for effective implementation. BUSA said “government must now demonstrate its delivery capacity on these commitments through decisive action”.
Structural reforms and business-government collaboration
BUSA acknowledged progress in areas where stronger collaboration between government and business has intensified, particularly in structural reforms in energy, transport, and logistics under the auspices of Operation Vulindlela.
“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 said. – SAnews.gov.za
