South Africa’s Debt Stabilises for First Time in 17 Years
South Africa’s debt burden is stabilising for the first time in nearly two decades, Finance Minister Enoch Godongwana announced in his budget speech to parliament on Wednesday. The minister said the country is showing cautious signs of recovery while also pledging increased spending on security.
“For the first time in 17 years, debt will stabilise and it will continue to fall in the coming years,” Godongwana told lawmakers.
South Africa’s debt, which had climbed to nearly 80 percent of GDP, is now expected to ease to 77.3 percent in the 2026/27 financial year and decline further to 76.5 percent the following year.
The announcement comes after South Africa secured its first major credit upgrade in more than 16 years. In November, S&P Global raised the country’s sovereign rating. Around the same time, South Africa was removed from the global money laundering watchdog’s “grey list.” Godongwana described these developments as “signals of restored credibility, of renewed resilience.”
The government plans to spend 2.67 trillion rand, about $168 billion, in the 2026/27 fiscal year. A significant portion will go toward peace and security, with funding expected to rise to 291.2 billion rand ($18 billion) by 2028. This will support army deployments alongside police in crime hotspots, as authorities battle persistently high violent crime. Official figures show South Africa records about 60 killings every day.
Godongwana also projected economic growth of 1.6 percent in 2026, reflecting cautious optimism about the country’s recovery.
Analysts say stabilising debt is a major milestone for South Africa, which has struggled with rising borrowing costs and fiscal pressures for years. The combination of improved credit ratings, removal from the grey list, and a commitment to stronger security spending suggests the government is trying to balance economic stability with social priorities.
The minister’s announcement marks a turning point, as South Africa seeks to rebuild investor confidence and strengthen its economy after years of fiscal strain. Economists note that stabilising debt could help reduce borrowing costs, free up resources for development, and improve the country’s standing with international lenders. Beyond the numbers, the government’s focus on peace and security spending reflects growing concern about violent crime and its impact on communities and businesses. By deploying the army alongside police in crime hotspots, authorities hope to restore public confidence and create safer conditions for investment and growth.
