CAPE TOWN, Feb 26 – South Africa plans to introduce a legal framework known as a fiscal anchor to strengthen public finances and improve long term budget discipline, the National Treasury said in its annual budget.
The proposed framework will set out guiding principles rather than fixed numerical targets. Authorities said they will present full details in the mid term budget later this year, following consultations. The Treasury added that the measure will require future administrations to outline medium term plans that support fiscal sustainability.
Officials said the government wants to formalize its fiscal approach in law to improve credibility and investor confidence as the country has recorded three consecutive primary budget surpluses, where revenue exceeds non interest spending, reflecting efforts to manage public finances.
At the same time, the latest budget showed a slight increase in deficit projections. The Treasury now expects a consolidated budget deficit of 4.0 percent of gross domestic product for the fiscal year starting April 1, up from a previous estimate of 3.8 percent.
Debt levels are also projected to rise before easing. Gross debt is expected to peak at 78.9 percent of GDP in the 2025 to 2026 fiscal year, higher than the 77.9 percent forecast in November. It is then projected to decline to 77.3 percent of GDP in 2026 to 2027.
Meanwhile, revenue estimates improved, supported by steady economic activity and stronger commodity prices. Economic growth remains modest, with projections at 1.4 percent in 2025 and 1.6 percent in 2026.
The Treasury said sustainable public finances remain critical, noting that rising debt service costs could reduce resources available for investment and growth if left unchecked.
