Steady finances, growing risks: What to expect from SA’s mini budget

By Isaac Matshego The Medium-Term Budget Policy Statement, the colloquial “Mini Budget”, draws far less attention than the Budget Speech in February each year.

However, it is an essential cog in the Treasury’s continuous and transparent budgeting process, an approach that has kept South Africa among the leading nations in budget transparency.

Think of it as the half-time pep talk about how public finances have performed in the first half of the fiscal year (FY, running from April to March) and how the game plan will be adjusted in the second half.

Additionally, it lays out the fiscal strategy for the subsequent three years.

This year’s Mini Budget will be presented against the backdrop of a more challenging macroeconomic environment relative to the prevailing conditions at the time of the February 2026 Budget Speech.

Not an easy task for Finance Minister Enoch Godongwana, but we have been here before.

Remember that the Russia−Ukraine war broke out a day after the tabling of the 2022 Budget, while the Covid pandemic engulfed the country a few weeks after the 2020 speech.

This year, the Middle East war started three days after the annual Budget speech.

All these events compelled the Treasury to revise the Budget metrics sharply.

So how do we expect the less favourable macroeconomic backdrop to affect the Treasury’s numbers? Encouragingly, the domestic economy has been resilient despite pockets of weakness in manufacturing and mining, and higher inflation.

Consequently, gross tax revenue, made up mostly of personal and corporate taxes, as well as value-added tax, has risen closely in line with the Budget Statement forecasts.

However, a less favourable economic environment, brought about by the sharp increase in fuel prices and global supply chain disruptions emanating from the Middle East war, poses risks to continued strong growth in the major tax collections.

Talking about taxes, the Treasury must be commended for its efforts to cushion the economy against the effects of the higher fuel prices.

The sharp reduction of the fuel levies between April and August sacrificed revenue exceeding R10 billion.