South Africa sees debt stabilising, lifts security spending in new budget

South Africa's finance minister on Wednesday said the country's debt burden is stabilising for the first time in nearly two decades, as the economy shows cautious signs of recovery.

The government plans to spend 2.67 trillion rand ($168 billion) in the 2026/27 financial year, including a targeted push to tackle crime following President Cyril Ramaphosa's decision to deploy the army to dangerous areas, Minister Enoch Godongwana said.

"For the first time in 17 years, debt will stabilise and it will continue to fall in the coming years," Godongwana told parliament in his budget speech.

Africa's most developed economy has struggled with high debt, which hit a record high of nearly 80% of GDP.

Credit upgrade

It is expected to ease to 77.3% in 2026/27 and decline further to 76.5% the following year, Godongwana said.

In November 2025, South Africa secured its first major credit upgrade in over 16 years after S&P Global lifted the country's sovereign assessment.

"These are signals of restored credibility, of renewed resilience and of a nation regaining its footing," Godongwana said, projecting growth of 1.6% in 2026.

With fiscal pressures easing, the minister said the government would also step up spending on security, a priority as authorities confront insecurity.

Security spending

Spending on peace and security would increase to 291.2 billion rand ($18 billion) by 2028, Godongwana said, in part to fund the deployment of army units alongside police in crime hotspots.

The measure announced by President Cyril Ramaphosa earlier this month was the latest in a series of tough moves by the government to contain crime in the country.