The minister of finance, Enoch Godongwana, this week requested in writing to the speaker of the National Assembly that the entire budget process be restarted and proposed May 21 as the new tabling date. This follows a fraught and drawn-out impasse centred largely around a proposed VAT increase, mounting debt and stagnant growth.
Restarting the budget process should not be an end in itself. It must become the beginning of a new fiscal and economic path that prioritises meaningful reform, private sector collaboration and rapid, inclusive growth.
The minister was right to stress the need to “safeguard the procedural integrity of the budget”, but the truth is that no amount of procedural rigour will save South Africa if the substance remains the same.
The International Monetary Fund (IMF) this week revised South Africa’s 2025 growth forecast down to just 1.0% — a further 0.5 percentage point cut that confirms what every South African already knows: we are nowhere near a recovery.
Without decisive investment and reform, South Africa will remain stuck in a cycle of budgetary brinkmanship, where every February and October becomes yet another crisis point.
Of even more importance is the real gross fixed capital formation, a measure of investments, which decreased by 0.7% in the fourth quarter of 2024.
The causes are structural, the solutions are known and the crisis is entirely of our own making. The only way to escape this cycle of stagnation and budgetary gridlock is to fund a bold and coherent economic reform plan.
Let’s avoid the drama next year. Let’s fund a plan now. Not a bureaucratic wishlist or another consultant-led framework. A real, tangible plan to get the economy growing at 5% a year.
We need to encourage ambition in the government, because as it stands now there is a paucity of ideas. The government needs to get serious about a focused medium-term strategy.
Below are the urgent funding priorities that should anchor the budget and undergird a pro-growth agenda:
Ease of doing business reform
South Africa ranks 84th globally in ease of doing business. Rwanda ranks 38th. You can register a business in Kigali in under six hours. In South Africa it can take six weeks. That delay isn’t just frustrating — it kills opportunity.
The budget must fund a fully digitised company registration platform, automate business licensing at all levels and modernise our customs and border systems. We must aim to move South Africa into the top 50 globally by 2027.
Infrastructure as a catalyst
The government currently invests less than 20% of GDP into infrastructure. By contrast, China invests over 40%. The result is that our roads, rail, ports and energy systems are failing. Infrastructure must be reframed, not as expenditure but as an enabler of growth.
The budget should unlock large scale investment in public transport (trains, taxis, buses), broadband and 5G rollout, and modern special economic zones (SEZs) with tax and logistics incentives.
Public-private partnerships (PPPs)
Currently, 78% of infrastructure is government funded. Globally, PPPs are used to accelerate delivery and improve quality — in India, Chile and Rwanda private sector participation is not a threat, but a tool.
Let’s establish a new PPP advisory unit within the National Treasury to fast track co-investment in water, energy, transport and housing. The budget must fund this unit and establish a dedicated pipeline of co-investment projects. Private capital is waiting. We must stop making them wait.
Support for SMMEs and entrepreneurs
Small and medium enterprises make up 40% of GDP — but receive only 6% of bank loans. That’s a structural failure which the government must fix.
To do so, focus should be on a national microfinance and credit guarantee scheme, startup tax relief and fintech partnerships to expand access to capital. The goal is to grow SMME credit access to 20% by 2027. The budget should also fund township entrepreneurship hubs linked to SEZs, where logistics, light manufacturing and digital startups can scale.
Labour market reform
South Africa’s youth unemployment rate is over 45%. Inspired by Germany’s dual education model, the budget should prioritise scaling TVET colleges and create a national apprenticeship fund with private sector placement targets. Regulation of the gig economy must also be introduced — giving young people flexible, fair work options. The goal is to reduce youth unemployment to below 30% by 2027.
Energy security
You cannot grow an economy without electricity. The budget must fund decentralised energy generation, expand rooftop solar incentives and support municipalities to procure directly from independent power producers.
Water Security
We lose 37% of our municipal water through leaks and mismanagement. The budget must prioritise upgrading water infrastructure, expanding smart meter rollouts and investing in desalination technologies in water-scarce metros. This must be accompanied by strict conditional grants tied to delivery milestones.
Trade expansion and industrialisation
South Africa cannot build long-term wealth by exporting raw materials alone. The focus must shift to value-added exports — processed foods, manufactured goods, textiles, green tech.
Boost export financing and leverage the African Continental Free Trade Area (AfCFTA) to double our manufacturing exports, in turn halving the trade deficit by 2028. Budget allocations should include support for export promotion offices, logistics upgrades at key ports and streamlined border infrastructure.
South Africa must urgently strike a new trade and investment deal with the US — our second-largest export market — so we can unlock fresh access for local goods, strengthen investor confidence and anchor our global competitiveness.
This is not the time for incrementalism. The IMF’s 1.0% forecast should be a national alarm bell. Without decisive investment and reform, South Africa will remain stuck in a cycle of budgetary brinkmanship, where every February and October becomes yet another crisis point.
The May Budget is a rare opportunity to reset the terms of engagement. We urge the minister and parliament to abandon symbolic reallocations and instead back a real medium-term plan for growth. We know where the bottlenecks are. We know what needs fixing. We now need the courage to do it.
• Maimane is Bosa leader
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