As South Africa prepares for the 2026 state of the nation address (Sona) today and the subsequent budget speech on February 25, we stand at a precarious yet promising intersection.
For those of us who have spent years in the engine room of parliamentary oversight and fiscal analysis, the present landscape feels markedly different from the era of state capture fallout.
After the 2024 election outcome, the 2024–29 Medium-Term Development Plan (MTDP) has been cast as our North Star, but the transition from political survival to macroeconomic performance remains the ultimate test for the government of national unity (GNU). Last year was defined by securing the stability of the centre. Now, with local government elections a matter of months away, the centre must prove it can fix the edges.
A reality check
A sobering reality check is required to ground our national discourse. While 2025 saw a broad-based recovery with four consecutive quarters of growth, the real GDP expansion of about 1.7% remains far below the 3% MTDP target that is essential for structural transformation.
Positive news is found in inflation, which averaged a 21-year low of 3.2% in 2025, providing much-needed relief to households. However, the 2025 Sustainable Development Report paints a starker picture: South Africa ranks 111th globally, with a Sustainable Development Goals (SDG) Index score of 64.1, indicating that we are far off track for the 2030 Agenda, particularly in poverty reduction and decent work.
Despite a marginal decline in the official unemployment rate to 31.9% by the third quarter of 2025, the broader Labour Underutilisation rate (LU3), which includes discouraged work-seekers, stands at a staggering 42.4%, with youth unemployment a national emergency at 58.5%.
Policy aspirations
The most persistent challenge in our economic landscape is the chronic misalignment between policy priorities and the budget framework. For years, the state of the president’s Sona has functioned as a grand catalogue of aspirations while the subsequent national budgets have operated under a separate, more restrictive logic.
A glaring example is the disconnect in which the MTDP explicitly targets a 3% growth rate to address joblessness, yet the budget is frequently presented with limited financial commitment or forecasts (such as the 1.7% mentioned) that, in effect, concede failure before implementation even begins.
The budget continues to focus heavily on technical financial targets such as debt-to-GDP ratios, often at the expense of the real social wage and the job-creation stimuli outlined in the president’s address.
This fiscal posture aligns with a global shift discussed at the 2026 World Economic Forum in Davos, where there was a strategic realisation that the state must act as an economic super actor, a role that requires moving beyond hands-off neoliberalism toward active economic planning and industrial policy to steer national development.
Reforming oversight
The role of parliament and provincial legislatures must be fundamentally reformed to manage this new era of coalition governance. The 2025 budget cycle, in which the initial budget was abandoned at the 11th hour due to political friction, exposed a legislature that was not ready for the complexities of a multiparty executive.
To prevent a repeat of such paralysis we must move away from a legalistic oversight model (focused on tickbox compliance) towards a developmental oversight model. This means monitoring the impact of spending on the MTDP priorities rather than just the technical correctness of the process.
The auditor-general’s August 2025 update on local government audit outcomes confirms this need: only 16% of municipalities achieved clean audits with widespread failures in institutional integrity directly depriving residents of basic services.
The 2026 Sona and budget represent a critical pivot point. We have built the foundation of stability; it is now time to build the house. The GNU must transition from a government that works together to one that works for the people, ensuring that the macro-stability achieved in the halls of power finally translates into tangible micro-outcomes for the layman in Khayelitsha, Soweto and Gqeberha.
• Jantjies, a former director of the parliamentary budget office, is a senior macroeconomic and fiscal analyst, professor of practice at the University of Johannesburg, and chair of the African Network of Parliamentary Budget Offices.
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