The 2026 mini-budget confirms that South Africa’s debt has stopped rising and the deficit is shrinking. But growth has been cut to 1.2%, the tax take is at a democratic-era high, and more than half of this year’s revenue windfall is unlikely to recur. For the first time in nearly two decades, South Africa’s public debt has stopped climbing as a share of the economy. Finance Minister Enoch Godongwana told Parliament on 21 October that gross debt stabilised at 78.4% of GDP in 2025/26 , and that both the deficit and the debt ratio will keep falling to the end of the decade. Bond investors liked what they heard: the yield on the benchmark 2035 government bond fell 16 basis points to 8.575% on the day. The same statement cut this year’s growth forecast from 1.6% to 1.2% . That gap — healthier books, a stalling economy — is the core of the 2026 Medium-Term Budget Policy Statement. Dawie Roodt, chief economist of the Efficient Group , gives the Treasury credit for the fiscal numbers but argues they are improving for the wrong reason: a rising tax burden on an economy that is barely growing. “Just a pity that we can’t get this economy to grow,” he said in his post-budget review. The evidence supports much of his case. It also complicates parts of it. What the Treasury got right The headline numbers are better than in February. The main budget deficit is projected at 3.7% of GDP this year, narrowing to 2.5% by 2029/30 . The primary surplus — what remains of revenue after non-interest spending — is set to rise from 1.7% of GDP this year to 2.9% by 2029/30 . Debt is forecast to edge down to 78.2% of GDP this year and 76.6% by 2029/30. Roodt accepts all of this and expects it to help South Africa’s credit rating. Rating agencies have already moved: Fitch upgraded South Africa to BB in June , and Moody’s and S&P both have the country on positive outlook. PSG’s Johann Els described the statement as friendly to both markets and rating agencies . The cost of past borrowing remains heavy. Debt service will cost R441.5 billion this year and absorb about a fifth of government revenue over the medium term — more, the Treasury itself acknowledges, than it will spend on health, social development or basic education . Where the extra R54 billion came from Roodt puts the revenue surprise at about R50 billion and attributes it to commodity-linked company tax and a revenue service that has become, in his words, “exceptionally aggressive”, “squeezing every last drop of blood out of the economy”. The published breakdown shows a more mixed picture. Main budget revenue for 2026/27 is R54.1 billion above the February estimate . Only R17.1 billion of that is tax . Mineral and petroleum royalties add R6.8 billion, departmental receipts R14.3 billion and National Revenue Fund receipts R16 billion . Among the one-offs are R10 billion returned from the Central Energy Fund, surpluses surrendered by public entities and higher interest on cash reserves . Anchor Capital classes R30.3 billion of the total as largely non-recurring . The commodity part of Roodt’s explanation holds. Within the tax line, corporate income tax is up R34.2 billion , largely offset by a R30.9 billion shortfall in the fuel levy after temporary relief. The minister himself said much of the improvement reflects higher commodity prices , which the Treasury expects to fade. SARS is collecting harder: by the end of September it had recovered R52.4 billion of the R126 billion in tax debt it expects to collect this year. But the figures do not show enforcement as the main driver of this year’s surprise. They show a commodity windfall and a set of one-off receipts — which flatters 2026/27 and is unlikely to repeat. Where the extra R54.1 billion came from A record tax take Roodt’s sharper point is about the overall burden. “We are being taxed to death,” he said, arguing that tax revenue as a share of the economy is the highest it has ever been. On the Treasury’s own figures, gross tax revenue rose from 25.1% of GDP in 2024/25 to an estimated 25.9% in 2025/26 , and the February budget projected 26.0% for this year. The joint SARS and Treasury tax statistics put the average since 1994/95 at 22.3% , and a BusinessTech analysis of that data found that 25.1% was already the highest since then. For the democratic era, the official series bears Roodt out. The Treasury’s February plan had the ratio reaching 26.2% by 2028/29 , as growth improves. Much of this year’s lift, though, came from commodity-linked profits that the Treasury itself expects to fade. A higher tax take is no substitute for a larger economy. Growth: 1.2%, or less? Roodt does not believe the economy will manage even 1% this year. There is evidence on his side. After growing 0.4% in the first quarter, the economy shrank 0.2% in the second , with trade, manufacturing and mining all contracting. The IMF this month forecast 1% growth for 2026 , below the Treasury’s figure. There is evidence against him too. TimesLIVE reported