JOHANNESBURG, Oct 26 – South African President Cyril Ramaphosa has credited the recovery of the South African Revenue Service (SARS) with improving tax collection and strengthening government finances, saying higher revenue is helping fund social programmes, infrastructure and development priorities.
Writing in his weekly newsletter following the presentation of the Medium-Term Budget Policy Statement (MTBPS) by Finance Minister Enoch Godongwana, Ramaphosa said the revenue service’s turnaround after the State Capture period was providing fresh momentum to public finances.
He described the improvement in the country’s fiscal position as evidence of progress, while stressing that stronger government finances must translate into tangible benefits for households and businesses.
According to Ramaphosa, approximately 60% of non-interest government spending is allocated to the social wage, which supports healthcare, education and services for lower-income households.
This spending includes free basic services for more than 11 million households, school meal programmes and social grants reaching over 18 million beneficiaries.
The government is also allocating additional funding to combat gender-based violence and femicide. The measures include hiring more than 3,500 social workers and strengthening investigative and forensic capabilities to support successful prosecutions.
Ramaphosa also pointed to the temporary reduction in the fuel levy as a measure intended to ease financial pressure on households amid elevated living costs.
Infrastructure and spending efficiency
Infrastructure remains the fastest-growing component of the national budget, according to Ramaphosa, who said the government was introducing mechanisms to attract greater private-sector co-investment to support economic growth and job creation.
The approach reflects an effort to expand infrastructure investment while managing fiscal constraints and encouraging private capital to participate in development projects.
The President also highlighted changes in public expenditure management, saying the government was moving away from broad departmental budget cuts towards targeted savings based on efficiency and programme performance.
By rationalising lower-priority or underperforming programmes, the State has identified more than R11 billion in medium-term savings, he said.
A review of the Infrastructure Conditional Grant is also underway to examine persistent underspending, project delays and substandard delivery by provincial and municipal authorities.
The review is intended to address weaknesses in how infrastructure funds are deployed, ensuring that budget allocations translate into completed projects and functioning public assets.
“Our aim is not to spend less but to spend smarter,” Ramaphosa noted, stressing that fixing the nation’s finances requires making sure every single rand is spent honestly and effectively.
Fiscal stability faces a broader economic test
The latest MTBPS has signalled greater fiscal stability and helped support investor confidence, but Ramaphosa cautioned that improvements in government finances should not be mistaken for a resolution of South Africa’s broader economic challenges.
He acknowledged that many citizens continue to face high unemployment, rising living costs and inadequate municipal service delivery, despite the progress in revenue collection and expenditure management.
“We shouldn’t mistake financial stability for the end of the road,” Ramaphosa said.
The distinction highlights the challenge facing the government: stronger tax collection and tighter expenditure controls can improve fiscal sustainability, but they do not automatically generate sufficient employment, raise household incomes or resolve weaknesses in public services.
The recovery of SARS has therefore become an important part of the government’s effort to improve the fiscal position without relying solely on spending cuts. Sustaining those gains will depend on continued revenue performance, more effective public expenditure and the ability to convert infrastructure spending into productive economic activity.
Ramaphosa said the ultimate measure of success would be whether the government could turn that “hard-won stability” into tangible economic opportunities for South Africans.
