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Published 6th March 2026

Vol 67 No 5


South Africa

Debt peaks as Treasury pushes for growth and credibility

Enoch Godongwana delivers his budget speech, 25 February 2026. Pic: governmentza
Enoch Godongwana delivers his budget speech, 25 February 2026. Pic: governmentza

The proposed Budget steadies public finances and gives taxpayers some relief, but sluggish growth and the jobs crisis still cast a shadow

South Africa has reached the peak of its debt mountain this fiscal year, Finance Minister Enoch Godongwana told Parliament in Cape Town in his 25 February Budget speech. Stabilising public finances – helped in part by a commodity price-driven rise in mining earnings and revenues – will allow him to increase infrastructure spending, offer tax breaks to job-creating small businesses, and argue that ratings agencies should upgrade South Africa’s sovereign rating. Within the limits of budgetary discipline, Godongwana tried to bolster upbeat economic sentiment but he faced harsh realities: business applauded his measures, unionists and activists were unimpressed.


Godongwana balances fiscal formula with spending boost

SOUTH AFRICA: DEBT STABILISING, BORROWING COSTS FALL. Copyright © Africa Confidential 2026
SOUTH AFRICA: DEBT STABILISING, BORROWING COSTS FALL. Copyright © Africa Confidential 2026

The Budget, which will become law only after parliamentary revision, further Treasury scrutiny, public comment and presidential assent, seeks to boost health and education spending. The cessation of...


Ratings war – Africa fights back

George Elombi. Pic: @afreximbank
George Elombi. Pic: @afreximbank

Fitch’s junk downgrade and withdrawal from Afreximbank highlight a wider battle over how global ratings agencies judge African lenders

An African bank and one of the ‘big three’ ratings agencies have fired their latest salvoes in a broader struggle over how the global financial system treats the...



BLUE LINES
THE INSIDE VIEW

The effects of the United States and Israel’s war on Iran are multiplying as the conflict spreads across the region hitting both economic and political targets. The first blows on Africa were economic. The resulting spike in oil prices will spark inflation across the continent just as many countries were stabilising public finances and bringing down borrowing costs. If Iran delivers on its threat to close the Hormuz Straits – through which much of East and Northern Africa’s foo...

The effects of the United States and Israel’s war on Iran are multiplying as the conflict spreads across the region hitting both economic and political targets. The first blows on Africa were economic. The resulting spike in oil prices will spark inflation across the continent just as many countries were stabilising public finances and bringing down borrowing costs. If Iran delivers on its threat to close the Hormuz Straits – through which much of East and Northern Africa’s food imports pass as well as a fifth of global oil exports – inflation will rise further still, and there could be prolonged commodity shortages. Fertiliser costs, already rising, could spike further, increasing food prices and input costs for farmers. That will hit east and southern African states. And tougher conditions will act as a drag on the continent’s biggest economies – Egypt, Kenya, Nigeria and South Africa – due to a combination of higher fuel and fertiliser prices and capital flight if global financial jitters intensify.

The war will have wider geopolitical effects. Russia will step up its search for naval bases on the Red Sea. The reach of Iran and the Gulf Cooperation Council states could weaken in Africa if it forces them to focus locally. States such as Turkey will boost their regional role. But the competition between Saudi Arabia and United Arab Emirates for influence in Africa may even deepen, despite their making common cause against Iran for now.

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