President Cyril Ramaphosa has said that the 2025 Budget is “a critical instrument to drive development, eradicate poverty and narrow inequality”.
At a time when economic growth is constrained and fiscal space is limited, the budget prioritises activities that encourage inclusive growth, providing a foundation for sustained recovery, he said.
In his weekly letter to the nation following the Parliament’s adoption of the 2025 Fiscal Framework and Revenue Proposals last week, Ramaphosa outlined the government’s strategic priorities.
“The 2025 Budget is designed to foster inclusive growth, reduce poverty, and tackle the high cost of living, while reinforcing the government’s efforts to create a capable, ethical, and developmental state,” he said.
”The Budget advances Government’s commitment to uplift the material conditions of South Africans.”
Earlier the South Africa’s National Budget was passed in Parliament by a slim majority of 192 votes for and 182 against, following a protracted session. Political parties, including most factions of the ANC, agreed on a fiscal framework, excluding the DA.
The budget passed with the condition that National Treasury would seek alternative solutions to raising VAT and alleviating income tax burdens for the poor. However,both the DA and EFF vowed to challenge the VAT increase in court.
Ramaphosa highlighted that after debt repayments, 61% of spending over the next three years would be directed towards the “social wage”.
This includes funding for free primary healthcare, education, housing, and social grants, such as childcare, old-age, and disability grants, which will increase above inflation this year.
Ramaphosa noted that the government will be extending the Social Relief of Distress grant for another year, which has been vital in poverty alleviation efforts.
Further investments are being made in healthcare, with higher funding allocations for clinics and community health centres, as well as recruitment and retention of health personnel, he said.
”The Budget allocates substantial funds to other frontline services such as teachers, police, emergency personnel and the Border Management Authority.”
In education, Ramaphosa said the budget prioritises teacher training, bilingual education, early childhood development, and improved reading programmes.
”Improving educational outcomes is key to community upliftment, development and producing the skills needed by our economy. Budgetary allocations have been made to support teacher training, for expanded mother-tongue bilingual education and for early reading programmes. This year sees a substantial investment in early childhood development, reflecting our commitment to establishing a solid foundation for the development of every child,” said Ramaphosa.
Ramaphosa stressed the importance of public employment programmes, which provide work opportunities in a challenging economic environment.
Additionally, funds have been allocated to support small businesses and incentivise youth employment through adjustments to the Employee Tax Incentive.
In an effort to spur economic growth, Ramaphosa said the budget will allocate up to R1 trillion for infrastructure development over the medium term.
”This includes the allocation in this Budget of an additional R62 billion over the next three years for road maintenance, electricity transmission lines, water and sanitation projects, school infrastructure and to support the ongoing recovery of our rail networks.”
Further support is provided for various growth-enhancing sectors, including automotive, business process outsourcing, and electric vehicle production.
To ensure the sustainability of social wage expenditure, Ramaphosa pointed out that higher levels of economic growth are crucial. He added that the government has made adjustments to municipal allocations to improve infrastructure, service delivery, and revenue collection systems.
”In a challenging economic environment – both locally and globally – this year’s Budget supports measures to drive growth and relieve the effects of poverty. At the same time, it aims to stabilise public finances and continue to reduce our national debt,” he said.
Ramaphosa emphasised that the 2025 Budget reflects the government’s Medium Term Development Plan, focusing on rapid, inclusive growth and state capacity.
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