Business Unity South Africa (BUSA) has welcomed the 2026 National Budget, praising its commitment to fiscal discipline and reform, while warning that economic growth remains too weak to meaningfully tackle unemployment.

Fiscal Milestones Restore Confidence

BUSA CEO Khulekani Mathe highlighted several major achievements over the past year, including the country’s exit from the FATF grey list and stabilizing debt levels. These developments, he said, demonstrate what is achievable when the country focuses on the right priorities and works together.

According to Mathe, the exit from the FATF grey list required coordinated efforts across government departments, agencies, and the private sector. He emphasized that fiscal consolidation has begun to restore market confidence, describing these as foundational steps toward rebuilding investor trust.

No Surprises on Tax, Gap Closed Without Hikes

BUSA commended the Budget for providing policy certainty, particularly on tax. Improved tax administration and expenditure reviews have generated sufficient savings to close a projected R20 billion funding gap in 2026/27 without additional tax increases.

The organisation welcomed targeted relief measures, including support for small businesses and households. These measures, BUSA said, ease financial pressure on households and entrepreneurs while supporting growth.

Municipal Failures a Major Constraint

Despite the positive fiscal outlook, BUSA warned that deteriorating local government performance threatens to undermine recovery. Mathe said that dry taps, potholes, sewage running through the streets, and non-functional traffic lights have become daily occurrences that erode confidence.

He argued that the measures announced in the Budget do not go far enough to address municipal dysfunction, which imposes direct costs on households and businesses. According to Mathe, the government needs to take more decisive action to improve service delivery and restore public trust in local governance.

BUSA noted that budget allocations align with priorities outlined in the President’s State of the Nation Address (SONA), including infrastructure development, job creation, and economic transformation. This alignment, the organisation said, reflects improved coordination within government—but stressed that delivery must now follow commitment.

Structural Reform and Private Sector Role

BUSA acknowledged progress under Operation Vulindlela, particularly in energy, transport, and logistics reforms. Mathe said private-sector participation, coupled with public-private partnerships currently under development, is essential to unlocking the growth potential of the South African economy.

He reaffirmed that business stands ready to partner with government to boost investment, accelerate structural reform, and create jobs. While welcoming the 2026 Budget as credible and stabilising, BUSA’s message was clear: fiscal repair is underway, but faster growth and stronger local governance will determine whether recovery translates into broad-based prosperity.

According to Mathe, sustained higher growth is essential to unlock job creation and long-term investment. He added that building on the positive developments to raise the growth rate must now be the focus of all efforts.

Despite the budget’s alignment with national priorities, the challenges in municipal governance remain a critical obstacle to economic recovery. The impact of these issues is felt directly by households and businesses, who face daily disruptions and inefficiencies in public services.

As the country moves forward, the emphasis will be on implementing the reforms outlined in the budget, ensuring that fiscal discipline is maintained while addressing the structural challenges that hinder growth and development.