Finance Minister Enoch Godongwana says South Africa’s consolidated budget deficit has narrowed to 4.5% of GDP in the current financial year, marking an improvement from the 4.8% projected in the 2025 Budget.
Tabling the national budget in Parliament of South Africa on Wednesday afternoon, Godongwana outlined a steady path toward further fiscal consolidation. The deficit is expected to decline to 4% in 2026/27 and then to 3.1% in the following year.
He attributed the improving outlook to government’s fiscal strategy, which focuses on accelerating public infrastructure investment, stimulating economic growth and improving the efficiency of public spending.
While the numbers suggest tighter belts at Treasury, motorists and consumers are likely to feel some pressure at the pumps and tills.
Fuel levies will increase broadly in line with inflation. The general fuel levy will rise by 9 cents per litre for petrol and 8 cents for diesel, while the carbon fuel levy climbs by 5 cents per litre for petrol and 6 cents for diesel. The Road Accident Fund levy will also go up by 7 cents per litre.
Excise duties on so-called “sin taxes” are also set to increase. From 2026/27, tobacco products including electronic nicotine and non-nicotine alternatives will face higher duties. Alcohol prices will also edge up, with an additional 8 cents on a 340ml can of beer or cider, 15 cents on a 750ml bottle of wine, and R3.20 more on a 750ml bottle of spirits.
Despite the tax adjustments, Treasury has maintained support for social protection programmes. Government has allocated R292.8 billion to social grants.
The old age, disability and care dependency grants will each increase by R80 to R2,400 in April 2026, while the war veterans grant rises to R2,420. The foster care grant will increase by R40 to R1,290 in April and by a further R10 in October. The child support and grant-in-aid payments will both rise by R20 to R580.