As South Africa prepares for the 2026 Budget Speech, President Cyril Ramaphosa has shifted the national conversation from recovery to cautious optimism, saying the country is on the brink of faster economic growth.
Speaking during the debate on the State of the Nation Address (SONA) on 19 February 2026, the President emphasised that sustained economic growth is essential to creating jobs and improving livelihoods.
“[We] know that what will make the greatest difference in people’s lives are jobs and other livelihood opportunities. What will make the greatest difference is accelerated economic growth. A growing economy means expanding opportunity and it means hope.
“We have not experienced the excitement and the promise of rapid growth for almost 20 years, but we are on the cusp of achieving it now. We are focused on rebuilding the economy and driving investment.
“We should not underestimate the scale of the task ahead nor diminish the progress we have made,” President Ramaphosa said.
SA Economic Growth Showing Positive Signs
Recent economic data shows four consecutive quarters of positive GDP growth:
- 0.6% in Q4 2024
- 0.1% in Q1 2025
- 0.8% in Q2 2025
- 0.5% in Q3 2025
Inflation has also remained stable, averaging between 3.5% and 3.6% since October last year. The President acknowledged that while progress remains modest, the “momentum of change is building”.
“Our task now is to sustain this momentum, to protect and build on the progress we have made, and to ensure that it results in a tangible improvement in the life of every South African. Improved economic indicators may seem distant and abstract, but they have a real impact on our lives.
“Lower borrowing costs for the state frees up resources for health and education, for the police and for better services. Reduced public debt enables the private sector to invest more of its capital in expanding production and jobs.
“A lower inflation rate reduces the cost of living, enabling families to pay for food and other basic needs. And a declining unemployment rate means an income for more families and hope for more young South Africans,” he said.
Government Removing Economic Impediments
President Ramaphosa outlined key reforms aimed at strengthening South Africa’s economic outlook ahead of Budget 2026.
“Severe load shedding was debilitating our economy, lowering production, raising costs and deterring investment. We have effectively ended load shedding.
“Overburdened infrastructure and inefficiency at our ports and on our rail lines have for years been reducing our competitiveness and harming our export industries. We are improving operational performance through investment, increased capacity and far-reaching reforms.
“To respond to low levels of investment and policy uncertainty, we are strengthening policy formulation and reducing regulatory burdens,” he noted.
The President added that poor governance, corruption and declining state capacity are being addressed through public service professionalisation, improved efficiency and procurement reform.
Macroeconomic Challenges Remain
Despite progress, Ramaphosa acknowledged that South Africa still faces a “challenging macroeconomic environment”.
“[This] is why we have been reducing high debt service costs and supporting lower inflation and interest rates.
“Perhaps one of the most immediate impediments to faster economic growth is dysfunctionality in many municipalities. We are addressing this through an overhaul of our local government system through the review of the White Paper, and through direct interventions in municipalities in trouble.
“The transformation of our network industries is the platform on which rapid inclusive economic growth will be achieved,” he said.
IMF Projects Stronger Growth For South Africa
The President’s optimism is supported by the International Monetary Fund (IMF), which recently projected that South Africa’s growth will accelerate.
“Growth is projected to accelerate to 1.4 percent in 2026, reaching 1.8 percent in the medium term, supported by resilient consumption and investment driven by structural reforms. Inflation is projected to reach the 3 percent target by end-2027.
“Although fiscal deficits are moderating, they remain elevated, and public debt is therefore projected to continue rising over the medium term.
“Risks are tilted to the downside, mainly stemming from global fragmentation, trade tensions, and domestic reform fatigue, while upside risks include faster reform implementation and stronger global growth,” the IMF said.
The IMF noted that economic activity strengthened in 2025, with growth estimated at 1.3% and inflation moderating to an average of 3.2%. Public debt reached 77% of GDP at the end of March 2025.
Boost To Business Confidence
South Africa’s removal from the Financial Action Task Force (FATF) grey list in October 2025 has further strengthened investor confidence.
“South Africa's removal from the FATF Grey List in October 2025…marks significant gains for the country, for business confidence and for investment.
“The FATF decision was the fruit of extensive collaboration between government departments and the financial sector to strengthen the country’s anti-money laundering regime,” National Treasury said.
Shortly thereafter, S&P Global upgraded South Africa’s credit rating from BB- to BB with a positive outlook.
“The upgrade reflects South Africa’s improving growth and fiscal trajectory, alongside the reduction in contingent liabilities largely tied to performance improvements at the state-owned electricity utility, Eskom.
“The government is on track to post its third annual primary surplus [revenue minus expenditure, excluding interest payments on debt] in fiscal 2025 [year ending March 31, 2026], while contingent liabilities are likely to ease as state-owned electricity utility, Eskom, is being reformed. Eskom has posted its first profit in eight years and is therefore likely to require less financial support going forward,” the institution said.
Treasury described the ratings upgrade as the first in more than 16 years and highlighted the importance of maintaining macroeconomic stability and accelerating infrastructure investment.
Call For Collective Effort
In his SONA address earlier this month, the President said the country is “stronger today than we were a year ago”.
“Our economy is growing again, and this growth is gathering pace. While we have experienced four consecutive quarters of GDP growth, we know that it has to grow much faster to meet our social and economic challenges.
“We have achieved two consecutive primary budget surpluses. Our credit rating has improved, interest rates are coming down and inflation is at its lowest level in twenty years. We are on a clear path to stabilising our national debt. The rand has strengthened against the dollar,” he said.
Ramaphosa concluded with a call for collaboration between government, business and citizens.
“We don’t all have the same role, but every role matters. Some people plan. Some people lift. Some people reinforce. Some people spot the leaks early and fix them before they become disasters.
“When we build like that – patiently, practically, together – we don’t just complete a project. We create a “neighbourhood”: a place where others can thrive because we chose to cooperate.
“So let’s build like beavers: with urgency, with unity and with the quiet determination to make something strong enough to hold – something that lasts and something that shelters more than just ourselves. Let us be the real builders of South Africa, working together,” President Ramaphosa said.
All eyes now turn to Budget 2026, where government is expected to outline how it plans to sustain growth, support job creation and stabilise public finances in the year ahead.
Additional reporting from SANews.gov.za
