Despite the ongoing Iran war and the disruptions at the Strait of Hormuz taking a toll on the African and global economies in general, South Africa’s National Treasury Director-General Duncan Pieterse has said that his nation remains firmly on course to achieve its fiscal objectives.
Speaking at the Citi Emerging Markets Macro and Credit Conference, Pieterse highlighted significant improvements in government debt management, fiscal discipline, and economic reform efforts in order to outline a positive outlook for the African major’s public finances.
Despite facing challenges like higher energy prices, inflationary pressures, and slower global growth, Pieterse said South Africa’s fiscal position has strengthened considerably and remains resilient enough to withstand external shocks.
The Pieterse-led National Treasury also cited the stabilization of government debt relative to GDP, stating that the February 2026 budget marked a historic turning point, as government debt stabilized relative to GDP for the first time since before the 2008 global financial crisis.
“For more than a decade, South Africa has battled rising debt levels driven by weak economic growth, increasing government expenditure and financial support for struggling state-owned enterprises. The stabilization of debt is seen as a major milestone in restoring confidence in the country’s public finances and reducing long-term fiscal risks,” Pieterse remarked.
As per the Treasury, South Africa has now recorded a third consecutive primary budget surplus, a phenomenon in which government revenue exceeds expenditure, excluding debt servicing costs. In Pieterse’s opinion, this achievement demonstrates the Cyril Ramaphosa-led government’s commitment to fiscal consolidation, as now chances are higher that the administration will be able to meet key budget targets while simultaneously implementing structural reforms designed to stimulate economic growth.
“The true test of fiscal credibility is to deliver on our fiscal objectives through the cycle, including in times of stress. The latest figures show that the primary surplus reached 1.1% of GDP during the 2025/26 financial year, exceeding the budget estimate of 0.9%. At the same time, the main budget deficit narrowed to 4.3% of GDP, outperforming the projected deficit of 4.6%,” Pieterse said.
South Africa’s improved fiscal performance has also received recognition from international credit rating agencies, with recent assessments by Moody’s and S&P Global Ratings noting the increase in the confidence level among global investors in the country’s economic outlook.
Moody’s recently revised South Africa’s outlook from stable to positive, while S&P Global Ratings maintained its positive outlook following the sovereign credit rating upgrade announced in November 2025. Pieterse informed that both agencies expect South Africa’s debt burden to decline steadily over the next three years as fiscal consolidation and structural reforms continue to gain momentum.
“South Africa currently stands out among major economies, being the only G20 nation with a positive outlook from Moody’s and one of only two G20 countries enjoying a positive outlook from S&P Global Ratings,” the National Treasury Director-General commented.
To consolidate its improving fiscal discipline further, the Ramaphosa government plans to introduce a formal fiscal rule during the Medium-Term Budget Policy Statement (MTBPS), scheduled for October 2026. Once it crosses the legislation stage, the fiscal rule will reinforce government commitments regarding debt reduction and maintaining primary budget surpluses.
“Such a framework would provide investors with greater certainty regarding government spending and borrowing decisions while enhancing fiscal accountability,” Pieterse said.
While the Treasury expects government debt to peak during the 2025/26 financial year before gradually declining over the medium term, the ratio has been projected to fall to 76.5% of GDP by the 2028/29 financial year, while the main budget deficit is forecast to narrow further to 3.1%.