Finance Minister Enoch Godongwana has announced temporary fuel levy cuts, billions in additional funding for social services and municipalities, and new resources to fight crime as government seeks to ease pressure on households while stabilising South Africa’s public finances.
Delivering the Medium-Term Budget Policy Statement (MTBPS) in Parliament on Wednesday, 21 October, Godongwana said the government’s fiscal consolidation measures were beginning to deliver results, despite weaker economic growth and ongoing global uncertainty.
“The difficult choices of the past few years were made for a purpose. To restore stability today so that we can build a faster-growing, more inclusive and more resilient economy tomorrow,” he said.
However, South Africa’s economic growth forecast for 2026 has been revised down to 1.2%, from the 1.6% projected in February, reflecting pressure from higher fuel prices, geopolitical conflict and the effects of El Niño.
Growth is expected to improve to 1.6% in 2027 and reach 2% by 2029.
Tax revenue boost helps turn debt tide
One of the key developments is the improvement in government’s debt trajectory.
The debt-to-GDP ratio stabilised at 78.4% in the 2025/26 financial year and has started to decline, marking a milestone after years of rising public debt.
The budget deficit is expected to narrow to 3.9% of GDP in the current financial year, better than the 4% forecast in February. It is projected to decline further to 2.5% by 2030.
Meanwhile, the primary budget surplus – the difference between government revenue and expenditure before debt-service costs – is expected to rise from 1.7% of GDP to nearly 3% by 2030.
Tax revenue estimates for 2026/27 have been revised upwards by R17.1 billion, supported by corporate income tax, VAT and stronger commodity prices.
Government expenditure is expected to increase from R2.7 trillion this year to R3 trillion by 2029/30.
The improved revenue outlook gives Treasury some room to provide targeted relief, although the government remains focused on containing borrowing and keeping debt on a sustainable path.
Fuel levy cuts offer temporary relief
One of the most immediate announcements for consumers was a temporary reduction in the general fuel levy worth R10 billion.
From 4 November to 1 December 2026, the levy will be reduced by:
- Petrol: R1.50 per litre
- Diesel: R3 per litre
The second phase will run from 2 December 2026 until 5 January 2027, with smaller reductions:
- Petrol: R1 per litre
- Diesel: R1.50 per litre
The funding will come from R10 billion in revenue overruns from the 2025/26 financial year that had been transferred to the Central Energy Fund. The money will be returned to the National Revenue Fund to finance the relief.
“This intervention will help ease cost of living pressures without compromising the sustainability of the budget,” Godongwana said.
The reductions are intended to cushion motorists and businesses against elevated fuel costs. Lower fuel levies can also help moderate transport and distribution expenses, although the final pump price will still depend on other fuel-pricing components.
Social grants and child nutrition receive support
Social spending remains a major part of the government’s budget, accounting for 60% of non-interest expenditure.
Government funding supports 18.1 million social grant beneficiaries through programmes including old-age, disability and child support grants.
More than 11 million households also benefit from free basic services, including water, electricity, sanitation and refuse removal.
The MTBPS includes R1.6 billion over the medium term for child nutrition, with a focus on maternal care and the first 1 000 days of a child’s life. The programme aims to help prevent malnutrition and stunting during a critical period of development.
Billions allocated to fight crime and GBVF
Government has reprioritised R3.8 billion over the 2027 Medium-Term Expenditure Framework period to appoint 3 552 social workers, strengthening the response to gender-based violence and femicide (GBVF).
A further R186 million has been allocated to improve forensic and investigative capacity.
Godongwana also announced plans to increase the number of sexual offences courts from 55 to 101 and expand Thuthuzela Care Centres supporting rape survivors from 72 to 80 by 2028/29.
An additional R157.4 million will go to the Department of Women, Youth and Persons with Disabilities to strengthen national coordination of the GBVF response.
Beyond gender-based violence, R810 million has been allocated to recapitalise the South African Police Service vehicle fleet. A further R823 million has been set aside for military deployments targeting gang violence and illegal mining.
The allocations are intended to strengthen law enforcement and improve support for vulnerable communities.
HIV and AIDS services get additional funding
The budget also addresses the financial pressure on HIV and AIDS programmes following the withdrawal of funding from the United States President’s Emergency Plan for AIDS Relief (PEPFAR).
Government will reprioritise R556.7 million over the medium term to sustain HIV and AIDS services. This will supplement R3.8 billion reprioritised through the district health programmes grant.
The funding is intended to help maintain essential services as South Africa adjusts to the loss of external support.
Municipalities receive billions for basic services
Local government is also set to receive additional support.
Municipalities will receive an additional R3.5 billion over the medium term for smart meter rollouts, aimed at improving billing accuracy and helping municipalities manage electricity distribution.
The local government equitable share will receive a further R21.8 billion to support basic services.
Godongwana stressed that funding must translate into visible improvements for residents, including more reliable services and better municipal management.
The challenge will be ensuring that the additional allocations result in practical improvements on the ground.
New digital platform planned for government services
Government also plans to spend R150 million developing the MyMzansi app, a digital platform intended to give citizens access to government services through their smartphones.
The initiative forms part of efforts to improve access to public services through digital channels.
Its impact will depend on how effectively the platform is implemented and whether people can access the services they need through it.
What the MTBPS means for South Africans
The 2026 MTBPS presents a balancing act for government.
Stronger tax revenue and a stabilising debt trajectory offer some encouragement, while the temporary fuel levy cuts provide immediate assistance to households and businesses facing high costs.
At the same time, billions have been directed towards social workers, crime prevention, health services, child nutrition and municipal infrastructure.
However, the downgraded growth forecast highlights the scale of the economic challenge. Sustained improvements in employment, investment and household living standards will depend on whether fiscal stability can be translated into stronger economic growth and better public services.
For now, motorists can look towards temporary fuel relief from November, while the longer-term test will be whether government can maintain its fiscal gains and deliver tangible improvements for South Africans.