Pretoria: In his weekly newsletter, President Cyril Ramaphosa has emphasised the crucial role of the 2025 Fiscal Framework and Revenue Proposals, which were recently passed by Parliament, in driving economic growth and relieving the effects of poverty. The budget – tabled by Finance Minister Enoch Godongwana in Parliament last month – was passed by Parliament last week.
According to South African Government News Agency, President Ramaphosa stated, “The 2025 Budget is directed at growing the economy and supporting the livelihoods of our people. It is a critical instrument to drive development, eradicate poverty and narrow inequality. At a time of constrained economic growth and narrow fiscal space, the budget must direct sufficient resources to activities that encourage inclusive growth and lay the groundwork for sustained economic recovery. It reflects the strategic priorities of the Government of National Unity: inclusive growth and job creation, reducing poverty and tackling the high cost of living and bui
lding a capable, ethical and developmental state.”
The budget has a strong focus on the social wage with 61% of resources directed at, amongst others, healthcare, education, housing and social grants. President Ramaphosa highlighted the government’s commitment to providing free water, electricity, and sanitation services to qualifying households under the indigent policy, which has been in place for the past 24 years. Social grants, including childcare, old age, and disability grants, will see above-inflation increases, and the Social Relief of Distress grant will be extended for another year.
To improve access to healthcare, the budget includes a higher allocation of funding to clinics and community health centres. The government is also investing in the recruitment and retention of health personnel, particularly doctors and nurses, to employ newly qualified doctors after their community service ends. Additionally, substantial funding is allocated to other frontline services such as teachers, police, emerg
ency personnel, and the Border Management Authority.
Budgetary allocations have been made to support teacher training, expanded mother-tongue bilingual education, and early childhood development programs, reflecting the government’s commitment to establishing a solid foundation for every child’s development. Funding for public employment programs and support for small businesses has also been allocated.
President Ramaphosa noted that sustaining expenditure on the social wage requires higher levels of economic growth. The budget allocates considerable resources to infrastructure development, which drives growth and job creation. Up to R1 trillion is expected to be spent on infrastructure over the medium term, including an additional R62 billion over the next three years for road maintenance, electricity transmission lines, water and sanitation projects, school infrastructure, and rail network recovery.
Support is also provided to growth-enhancing measures in the medium term, including incentive programs in
the automotive, business process outsourcing, special economic zones, electric vehicle production, clothing and textiles, and other sectors. South Africa’s municipalities will receive adjusted budget allocations to address infrastructure needs and improve service delivery.
In a challenging economic environment, both locally and globally, this year’s budget supports measures to drive growth and alleviate poverty while aiming to stabilise public finances and reduce national debt. The budget reflects the priorities of the Government’s Medium Term Development Plan, a five-year program of action that prioritizes rapid, inclusive growth, creating a more just society, and building state capacity. President Ramaphosa concluded by emphasizing the need for collective efforts using limited resources for the common good of the South African people.