MTBPS 2026: Rising revenue allows for fuel levy relief, El Niño readiness in Godongwana’s mini-budget
This Medium-Term Budget Policy Statement is a big deal: debt stabilisation has been the elusive Holy Grail long pursued by Treasury, and is the metric that the markets and credit ratings watch like a hawk.
South Africa's Medium-Term Budget Policy Statement (MTBPS) 2026 has unveiled a series of fiscal measures aimed at stabilising the nation's debt and providing relief to consumers. Finance Minister Enoch Godongwana announced the reduction of the fuel levy by R3 per litre for diesel and R1.50 per litre for petrol, set to take effect from 4 November 2026 to 1 December 2026.
This move comes as the government has successfully rebuilt fiscal buffers, with debt-to-GDP stabilising at 78.4% of GDP in 2025/26, and is anticipated to further decrease to 66.6% by 2035.
The rise in precious metal prices has led to a revision of gross tax revenue upwards by R17.1-billion, exceeding expectations and contributing to the narrowing budget deficit. The government now projects a deficit of 4.3% of GDP in 2026, down from the initial forecast of 4.5%. In anticipation of the upcoming El Niño weather pattern, which is reportedly the strongest on record, the government has increased its drought and El Niño contingency reserve to R10-billion for 2026/27.
The mining sector played a pivotal role in the fiscal boost, with higher precious metals prices contributing to increased revenue. The Ministry of Finance aims to embed a fiscal anchor in legislation to ensure accountability and adherence to fiscal objectives, despite the forecasted slow economic growth of 1.2% in 2026, expected to rise to 1.6% in 2027 and 2% by 2029.
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