After two unsuccessful attempts, South Africa awaits a new budget on Wednesday.
It needs to be a roadmap for investing in the priorities that matter: wasteful spending must be cut, deficits must be responsibly reduced, education, policing and healthcare need to be resourced to service our people, and digital and physical infrastructure must be delivered to help create jobs. With the right approach and priorities, this third iteration could be the budget that South Africans have been calling for.
In addition to the numbers, the budget needs to focus on a few central tenets. Evaluating the current context and building on what we’ve learnt through the previous budget rounds is important at a time when South Africa is dealing with weak economic performance, rising unemployment, energy insecurity and inadequate digital and physical infrastructure. The stakes are extraordinarily high for ordinary South Africans.
A budget that addresses immediate needs and long-term structural reforms is essential to alleviate South Africa’s pressing challenges, including economic stagnation, load-shedding and critical infrastructure.
Several polls have underscored that unemployment remains the foremost concern for South Africans, with people identifying job creation as a top priority and most expressing anxiety about job availability. This public sentiment, driven by high unemployment rates, demands urgent action.
By prioritising investments in infrastructure, energy stability, and skills development to unlock new industrial pathways, Budget 3.0 could stimulate economic growth and restore the labour market to a reasonable degree of health, addressing both the immediate need for jobs and the structural barriers that perpetuate economic exclusion.
Currently, relationships have become increasingly strained — both within our government and with key trading partners — which has created much volatility in our economy. The global trade war is creating heightened uncertainty. Escalating trade concerns could disrupt trade and investment flows and drive up costs for businesses and consumers.
Following the gruelling budget process, the time has come for the government of national unity to put development at the centre of co-governance. It is entirely possible, provided members put aside political differences and focus on principles rather than political posturing.
Producing a coherent economic vision will require compromise without sacrificing principles that benefit South Africans. Time after time, South Africa demonstrates an uncanny ability to rise to complex challenges. A budget that intelligently incorporates diverse priorities could demonstrate a new model of collaborative governance that works for all South Africans. In fact, the budget could be proof that the coalition government can deliver economic governance.
Boosting the fiscus
Possibly the most important lesson is that South Africa needs to have an economic model that works to address the problems that are particular to the nature of our economic reality. We need an entirely new approach, one that prioritises development, fiscal health and efficiency. What this means practically is going back to basic principles to achieve more responsible economic management and less wastage at all levels of government, including at the municipal level, where service delivery has been problematic.
The new budget must institute strong oversight mechanisms and accountability measures that ensure every rand serves its intended purpose. Resources should be allocated to strengthen institutions that combat corruption, and performance-based budgeting that rewards efficiency and results should be implemented.
Government spending must be targeted to stimulate growth to ensure the country’s gross debt as a share of GDP reduces, and this needs to be balanced against the drive to reduce South Africa’s high unemployment rate. Every budget decision must be evaluated through this dual lens of fiscal responsibility and job creation. The real key to economic growth is increasing fixed investment in the economy. We can only achieve this by creating an environment attractive to foreign investors.
This delicate balance requires careful consideration of which sectors and initiatives can generate the greatest employment impact while offering reasonable commercial returns on investment.
Regular, rigorous spending reviews will help to improve the quality and sustainability of government spending. We need to continuously evaluate whether money spent by the government provides value, and whether public services to South Africans are effective and efficient. Productive capacity must be boosted through investments in manufacturing, education and entrepreneurship.
The budget South Africans deserve will demonstrate that cooperative governance can deliver meaningful economic outcomes when it emerges as a product of dialogue and negotiation.
Foreign trade is another pivotal element needed to boost the fiscus. South Africa is rich with potential, and we have minerals which are in demand globally. Foreign exchange earnings represent our ability to create jobs, export raw and beneficiated goods, and service debt obligations. Each rand earned through exports translates to economic growth and employment opportunities for South African households.
Our abundance of critical minerals — from platinum and palladium to manganese and chromium — positions us strategically in the global transition to clean energy and advanced manufacturing. The budget is an opportunity to boost regional economic integration with our neighbours. It must also allocate resources to remove bottlenecks in the mining value chain while promoting beneficiation that adds value domestically before export.
Additionally, our agricultural sector offers significant export potential if supported adequately with water infrastructure, research, and market access initiatives. Tourism — another foreign exchange earner — requires investment in security, transportation networks, and destination marketing to recover and grow the sector.
A forward-thinking budget must invest in infrastructure that facilitates both domestic and international trade. While some investment has been made with a view to modernising network industries such as electricity, water, transport and digital communications, substantial investment is necessary. Our ports, railways and border posts must be modernised, managed, and maintained efficiently.
The Durban port, Africa's busiest, could be the gateway to the continent if turned around. Our rail network has deteriorated, but once rejuvenated, it could support mining companies and industry and alleviate pressure on our roads.
Digital infrastructure is equally important, enabling South African businesses to participate in global value chains. While the cost of data has fallen in recent years, South Africa still ranks among the more expensive countries for mobile data, hampering economic opportunity, education, and healthcare delivery. In addition, network access in outlying areas continues to be a challenge. Systems that provides high-speed internet access in areas where traditional internet infrastructure is limited or nonexistent could be transformative.
For effective trade negotiations and relationship management, South Africa needs skilled trade negotiators, diplomats, and business leaders who can build and maintain productive international relationships that serve our national interests.
The budget South Africans deserve will demonstrate that cooperative governance can deliver meaningful economic outcomes when it emerges as a product of dialogue and negotiation. If it addresses these crucial areas while maintaining fiscal discipline, it will be the budget worth waiting for.
This budget represents more than fiscal policy — it is a statement of national priorities and values. It must reflect the aspirations of all South Africans: entrepreneurs seeking opportunity, workers seeking dignity, families seeking security, and communities seeking services. Only through inclusive growth and shared prosperity can we build the South Africa we all envision.
• Reon Barnard is CEO of Tabono and co-founder of BCR Holdings, a mining entrepreneur and builder of businesses who advocates for sustainable economic development in South Africa
For opinion and analysis consideration, e-mail Opinions@timeslive.co.za
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