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 Wednesday, as Africa's most developed economy shows cautious signs of recovery and pledges 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 parliament in his budget speech.

Debt, which hit a record high near 80% of GDP, is expected to ease to 77.3% in 2026/27 and decline further to 76.5% the following year.

Credibility restored

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

It was also removed from the global money-laundering watchdog's "grey list." Godongwana called these "signals of restored credibility, of renewed resilience."

Security spending boost

The government plans to spend 2.67 trillion rand ($168 billion) in 2026/27, with peace and security funding increasing to 291.2 billion rand ($18 billion) by 2028.

This will fund army deployment alongside police in crime hotspots, as authorities confront persistently high violent crime—averaging about 60 killings daily.

Godongwana projected 1.6% growth in 2026.