South Africa’s 2026 National Budget charts a fiscally responsible path, stabilising debt while supporting growth and investor confidence.
Source: Supplied. Citadel chief economist, Maarten Ackerman.
With no new tax hikes, targeted tax benefits, and infrastructure investment, it benefits taxpayers, borrowers, retirees, and globally mobile South Africans. Analysts, including Citadel, praise its credibility, highlighting its role in fostering stability, trust, and long-term economic growth.
“With debt stabilising for the first time in 17 years, no headline tax increases, several tax threshold increases, improved savings incentives and continued infrastructure investment, the Budget signals policy stability and reform continuity rather than populism,” says Citadel chief economist, Maarten Ackerman.
“It’s a prudent, disciplined and confidence-building budget in the sense that Treasury could have probably done more given the windfall we’ve seen from the commodities boom. But it’s clear that they want to stick to a disciplined fiscal framework.”
Debt-stabilising Budget plan
In the 2026 National Budget, the government reaffirmed its commitment to stabilising debt, narrowing the budget deficit and growing the primary surplus, says Ackerman.
“Debt is projected to stabilise and decline over the medium term – a significant turning point for SA’s public finances. Debt-service costs are also easing as borrowing costs fall and debt stabilises, creating gradual fiscal space over time. While these costs remain one of the largest expenditure items, the trajectory is improving,” he explains.
“It is hopefully a turning point, because everything is looking better. It’s a fiscally credible budget that confirms that SA is going down the right path. In summary, the policy direction is positive and now implementation just needs to follow.”
Support for taxpayers and consumers
The absence of major tax-rate increases – with value-added tax (Vat) unchanged and no personal or corporate tax hikes – reinforces predictability for households and businesses. The inflation adjustment to tax brackets for the first time since 2023 provides additional relief, supporting disposable income and consumer-led growth, Ackerman says.
The Budget also strengthens incentives for long-term saving and investment, including higher limits for tax-free savings accounts (from R36,000 to R46,000 per year), retirement fund contributions (the limit to retirement fund deductions will be raised from R350,000 to R430,000) and a number of capital gains tax exclusions and donations tax exemptions. These measures encourage greater participation in formal savings vehicles and bolster retirement security.
Investor- and expat-friendly Budget
The continued focus on infrastructure – particularly energy transmission, logistics corridors and water – positions capital spending as a central growth lever, with an emphasis on crowding in private-sector participation and investment, says Ackerman.
Reforms in electricity, logistics and governance, together with enhanced credibility following SA’s removal from the Financial Action Task Force grey list and its first sovereign credit-rating upgrade in 16 years, reinforce policy momentum.
The Budget also includes measures that reduce friction in capital flows and increase offshore financial flexibility, supporting globally mobile South Africans and cross-border investors.
Focused on sustainable growth
While implementation risks and structural challenges remain, Ackerman says Budget 2026 sends a clear signal that has led to positive market reactions: SA is prioritising stability, sustainability and reform which is a constructive foundation for long-term growth and investor confidence.
