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Graphic depicting debt
Since 2008/09, government’s debt ratio has more than tripled however, Finance Minister Enoch Godongwana forecasts the country’s debt-service costs to fall.
Godongwana says gross debt will stabilise as a share of GDP in 2025/26, at 78.9 percent.
https://www.youtube.com/watch?v=y_90yrW5108
While delivering this year’s Budget Speech in Parliament, Cape Town, he said, “In 2026/27 it falls further to 77.3 percent of GDP and declines to 76.5 percent by 2028/29.”
The minster added that the slightly higher debt peak this year reflects weaker nominal GDP growth and the country’s decision to take advantage of strong investor demand in domestic and global markets by increasing issuance in 2025/26.
Treasury says debt-service costs have risen from 8.8 percent of revenue to 21.3 percent in 2025/26, crowding out other spending, while still maintaining the country’s debt –service costs will reduce from 21.3 percent to revenue in 2025/26 to 20.2 percent in 2028/29.
Treasury says it has made progress to turn this around and ensure that debt is under control.
The country’s debt as a share of economic output will reach its highest point this year and then start to decline saying that the main budget deficit is R12.4 billion lower than estimated at the time of the 2025 Budget as a result of strong fiscal outcomes for the first 10 months of 2025/26.
Over the next three years, treasury expects the repayment of debt and its interest to be R21 billion lower than estimated in the 2025 Medium Term Budget Policy Statement (MTBPS).
