Finance Minister Enoch Godongwana has said the National Treasury recognises the pressure that rising debt-service costs place on the fiscus.

Godongwana said the department has implemented measures to prevent debt from crowding out core development spending.

“The 2025 Medium-Term Budget Policy Statement outlines a spending framework that allocates R4.2 trillion to the social wage over the medium term, including social protection, education, and health and community development.

“In 2025/26 alone, R1.3 trillion is directed to these pro-poor functions, compared to R421.5 billion for debt-service costs, demonstrating the government’s ongoing prioritisation of social investment despite fiscal constraints.t,” he said.

Godongwana was recently responding to parliamentary questions from MK Party MP Adil Nchabeleng, who noted that the escalating debt service costs were now consuming resources that should be directed toward critical social investment, poverty relief, and community development.

The minister stated that in an effort to protect service delivery, the National Treasury’s fiscal strategy aimed to stabilise debt as a share of GDP and the budget, thereby reducing the pace at which interest costs grow.

“As this stabilisation takes effect, more fiscal space becomes available for frontline services. This is already visible in the medium-term numbers, where funding for economic development, health, learning, and culture is projected to grow faster than debt-service costs, allowing government to maintain and strengthen key public services.”

Godongwana also stated that the budget continues to allocate the largest share of resources to the social wage, which directly supports low-income households and workers through grants, education funding, healthcare access, and community services.

“Protecting and expanding these allocations remains a central component of the fiscal framework, ensuring that consolidation does not fall disproportionately on the poor,” he said.

The minister added that the government’s approach balances debt stabilisation with sustained investment in community development and human capital in an attempt to avoid entrenching long-term fiscal neglect in vulnerable communities.

“By gradually reducing the pressure of interest costs relative to the budget, the strategy creates room for future expansion in poverty-reducing programmes, employment-linked development initiatives, and service-delivery infrastructure,” he said.

“In summary, Treasury’s fiscal strategy aims to stabilise the debt trajectory while ensuring that core social priorities continue to rise in real terms, safeguarding service delivery, reducing inequality and protecting vulnerable communities from long-term fiscal exclusion,” added Godongwana.

mayibongwe.maqhina@inl.co.za

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