JOHANNESBURG – While Finance Minister Enoch Godongwana described his 2026 Budget as “a turning point”, one economist says it will do little to ease the everyday cost of living.
Iraj Abedian, chief economist at Pan-African Investment and Research Services, conceded that the 2026 Budget figures are more credible and pragmatic.
“As the minister also admitted, over the past 15 to 16 years, budgetary numbers were not credible. It had a very difficult time from an economical and fiscal growth point of view. It also destroyed its own credibility and now it is beginning to reestablish that credibility,” Abedian said.
Godongwana said the economy is expected to grow by 1.6% this year, rising to 1.8 percent next year and 2 percent in 2028.
The consolidated budget deficit has narrowed to 4.5% in 2025/26, improving on the 4.7 percent projected in the 2025 Medium-Term Budget Policy Statement. It is expected to decline steadily over the next three years to 3.1 percent by 2028/29.
However, Abedian argues that while these numbers matter for macroeconomic stability, they mean little for the lived reality of many South Africans.
“The lived reality of our citizens depends upon the way and the determination in which value for money is achieved,” Abedian said.
“We cannot allocate to the right goals with good intentions and then money gets squandered and stolen. The Budget did not spend enough time engaging South Africans on how their lives will be changed.”
Abedian emphasised that more resources should be directed towards improving the lives of the poor and unemployed.
“Of course, the middle income and the rich are important, but the majority of our population are poor. We need to say, ‘how do we make the resources that we have to go further to improve the lives and lived reality of our poorer and low-income earners’. In that regard, the Budget didn’t perform well.”
Meanwhile, human rights organisation Black Sash says it is unhappy with the grant increases.
The organisation’s Hoodah Abrahams-Fayker says Godongwana and his team should at least use the food poverty line as a benchmark.
“The child support grant and the social relief of distress grant should be increased to the food poverty line of R855. People are struggling to survive, and social grants are a significant lifeline,” said Abrahams-Fayker.
“We also know that although the amount of the grants for the old age and the disability is more, they have more needs and so would expect at least a considered amount above the inflation rate because of the cost of living.”