Finance Minister Enoch Godongwana will unveil his Medium-Term Budget Policy Statement on Wednesday, 12 November 2025. (Photo: Dwayne Senior / Bloomberg via Getty Images) 
Finance Minister Enoch Godongwana is expected to stick to his guns on fiscal discipline as he navigates the challenge of a slow economic growth trajectory when he unveils his Medium-Term Budget Policy Statement (MTBPS), or mini budget, on Wednesday, 12 November 2025.
“The Medium-Term Budget Policy Statement this week is another opportunity for the government to signal real progress in improving the management of the country’s finances,” Busisiwe Mavuso, CEO of Business Leadership SA, said in her weekly newsletter on Monday.
“The remarkable story is that despite our extremely weak economic growth levels, the government has managed to keep tight control of both expenditure and revenue. Indeed, many economists are expecting better numbers than were tabled when the Budget was finally passed earlier in the year.”
The Medium-Term Budget Policy Statement is a blueprint of the policy fiscal framework for the next three years and sets the stage for the annual Budget, which is usually delivered in February — though this year it was May because of the VAT spat.
Read more: State of the spend — charting Budget 3.0
The political storm over VAT has now largely subsided and Godongwana has a number of fresh winds in his sails. These include South Africa’s recent removal from the Financial Action Task Force grey list, which is testimony to The Treasury’s capacity to get things done and raises the prospect of a credit ratings upgrade.
Read more: South Africa scrubs off FATF greylisting and reclaims financial compliance mojo
The precious metals price rally for gold — which has smashed record after record — and platinum group metals (PGMs) also bodes well, and not just on the revenue front, through increased taxes and royalties from a sector that threw the Treasury a lifeline a few years ago when prices were red hot.
Read more: Central banks and investors fuelling record gold prices amid global uncertainty
“The gold rally could help to ease the financing burden, as it has likely swelled the value of the Gold and Foreign Exchange Contingency Reserve Account; the authorities could use this to further lower the borrowing requirement,” said Razia Khan, chief Africa economist at Standard Chartered in London.
The Treasury drew on the contingency reserve account — an account held at the Reserve Bank that captures gains and losses on the country’s foreign currency reserve transactions — in 2024 for R150-billion to lower debt issuance over three years.
“We believe Finance Minister Enoch Godongwana will have a generally more positive story to tell compared to earlier this year, owing to improved market sentiment and favourable precious metal prices. That said, we do not expect government debt to stabilise over the medium term, as spending demands remain high,” Jee-A van der Linde, senior economist at Oxford Economics Africa, told Daily Maverick.
Other promising winds include Eskom, which is more or less keeping the lights on, and signs that Transnet is slowly coming right. And there are no more massive bailouts expected for South Africa’s failing SOEs — that tap, like many Joburg sinks, has run dry — but government guarantees on their debt could be raised.
On the macro front, inflation has slowed significantly: in 2022, it averaged 6.9%, in 2023 6.0%, and last year 4.4%. In 2025, its average is well on track to be below 4.0%.
This in turn has enabled the South African Reserve Bank (Sarb) to lower interest rates as it talks up a lowering of its inflation target from the current wide range of 3.0% to 6.0% to a firm anchor of 3.0% — an anchor that is now its de facto target.
Daily Maverick understands that this has not been set in stone yet, but Godongwana is expected to allude to it in the Medium-Term Budget Policy Statement before a definitive announcement in February.
In a nutshell
Crafting a medium-term outlook for the country’s finances that looks credible is essential to convince investors to keep buying South African debt — and such demand helps to keep debt service costs down. And debt levels in turn need to reverse course and come down because they are simply unsustainable given South Africa’s slow growth trajectory. The government needs to spend less on debt and more on health, education, roads, water — you name it.
Still, there are ominous clouds swirling over the macroeconomic picture, notably South Africa;s stubbornly low rates of economic growth.
When the Medium-Term Budget Policy Statement was presented last year, the Treasury was forecasting growth for 2024 of 1.1% — a significant overshoot of the 0.6% that was eked out in the end.
In March, the National Treasury’s forecast growth for 2025 was 1.9%. This was whittled down to 1.4% when the delayed Budget was unveiled in May. The Sarb’s current forecast is 1.2%, and most economists see it at about that level or even lower. The chart below was supplied by Momentum Investments on Thursday, 6 November.
Slow growth itself is deeply concerning and the constant downward revisions to the outlook — a recurring feature of the Medium-Term Budget Policy Statement and Budget presentations for years — cloud the Treasury’s projections for revenue collection and debt reduction because they are predicated on expectations of economic growth.
For example, in the May budget, government debt was forecast to stabilise at 77.4% of gross domestic product (GDP) in 2025/26 — 1.2 percentage points higher than anticipated in the scrapped March Budget.
“This... is mainly due to lower nominal GDP,” Godongwana pointedly noted in his May Budget speech.
Still, there are hopeful signs and SARS has stepped up to the plate with improved revenue collection, catching scraps that previously fell through the holes opened during the era of State Capture.
“Low inflation and healthy foreign investor demand for South African government bonds will contribute to lower debt-service costs. The key is whether debt-to-GDP will stabilise at a lower level than the 77.4% forecast in the Budget, and continue to fall thereafter,” said Khan.
Godongwana has a penchant for rakishly stylish hats. We’ll see what he pulls out of one on Wednesday. DM