Godongwana defends R1.5bn-a-day borrowing amid rising debt projections in 2026

South Africa’s debt is projected to rise in nominal terms from R6.12 trillion in 2025/26 to R6.94trln in 2028/29

- SIPHELELE DLUDLA

TABLING the Budget in Parliament, Finance Minister Enoch Godongwana said gross debt will stabilise as a share of GDP in 2025/26 slightly higher than previously projected before falling in 2026/27 and declining further to 76.5% by 2028/29.

(GCIS)

FINANCE Minister Enoch Godongwana has defended the government's decision to increase borrowing this year despite assurances that public finances are stabilising.

This comes as the 2026 National Budget Review on Wednesday revealed that South Africa’s debt is projected to rise in nominal terms from R6.12 trillion in 2025/26 to R6.94trln in 2028/29.

With the gross borrowing requirement comprising the budget deficit, maturing debt and the R80bn Eskom debt-relief arrangement revised down to R563.4 billion from the R588.2bn projected in the 2025 Budget, the government is projected to borrow at an average of about R1.5bn per day.

However, Godongwana said the debt-to-GDP ratio will remain elevated before gradually declining over the medium term.

Tabling the Budget in Parliament, Godongwana said gross debt will stabilise as a share of GDP in 2025/26 at 78.9% — slightly higher than previously projected — before falling to 77.3% in 2026/27 and declining further to 76.5% by 2028/29.

He reiterated that debt will peak this year for the first time in 17 years and then enter a sustained downward trajectory, underpinned by a disciplined fiscal strategy and structural reforms.

“The slightly higher debt peak this year reflects weaker nominal GDP growth and our decision to take advantage of strong investor demand in domestic and global markets by increasing issuance in 2025/26,” he said.