No Ordinary Wednesday | Mini-Budget 2026: More revenue, less borrowing?

South Africa’s upcoming medium-term budget policy statement faces significant pressure from a challenging global environment, including Middle East conflict-driven energy costs and the impact of El Niño on agricultural output. While higher precious metal prices provide a temporary revenue boost, fiscal sustainability remains precarious due to stagnant growth and rising borrowing costs. The government must move beyond cyclical windfalls and demonstrate structural improvements, such as controlling recurring expenditure and reducing the debt-to-GDP ratio. Investors are currently weighing these fiscal risks against the credibility of the Reserve Bank’s inflation targets and the Government of National Unity’s commitment to fiscal discipline. Achieving long-term stability requires moving away from debt-dependent spending and implementing growth-enhancing reforms, as reliance on commodity revenue alone fails to secure a lasting improvement in public finances or credit ratings.