Fiscal discipline and rising infrastructure spend create a foundation for investment - BLSA

LAST week's budget delivered encouraging signals for business confidence and infrastructure investment.

- BUSISIWE MAVUSO

While not addressing every challenge we face, it demonstrated continued fiscal discipline and improving infrastructure spending that should help unlock the private sector investment South Africa desperately needs.The fiscal position is clearly on an improving trajectory. The government is on track to deliver a primary surplus for the third consecutive year, meaning revenue exceeds non-interest spending. The debt-to-GDP ratio is stabilising and beginning to decline. Tax collection performance remains strong, with SA Revenue Service exceeding revenue targets. This matters. It is what enabled the S&P credit upgrade, what drives lower borrowing costs, and what gives investors confidence that South Africa won't face a fiscal crisis. The macroeconomic stability this creates is the foundation for everything else.

I found myself reflecting on how this and many other signals in the budget - debt stabilisation, strong tax collection, advances in financial sector regulation, improved performance of state-owned enterprises all show how the quality of leadership in the public sector is translating into tangible progress. We cannot forget the perilous state we were in less than a decade ago, when our institutions were crumbling before our eyes, when debt was spiralling and tax collection collapsing. This budget shows continued decisive movement in putting that behind us and empowering the right people to get on with the job of running the state well. It is all about keeping people accountable for delivering, and we must credit the state for the improvements it has made, even while recognising how much more there is to be done.