As Finance Minister Enoch Godongwana prepares to deliver the 2025 Budget Speech on Wednesday, stakeholders across South Africa are urging the government to address pressing socio-economic challenges.
Here are the critical areas demanding urgent attention:
1. Taxi industry subsidy: a call for inclusion in public funding
The South African National Taxi Council (Santaco) has intensified calls for a government subsidy, arguing that the industry—valued at over R90 billion annually and employing 300,000 people—remains underserved despite its role in transporting “the poorest of the poor.” Santaco Secretary-General Daki Qumbu emphasised – in an interview with Newzroom Afrika – the sector’s post-pandemic struggles:
“The industry is making money, but what kind of money is that? Since Covid-19, it has been very difficult to recover. Many families are suffering, and we believe it is the right of the taxi industry to receive the subsidy, like other modes of transport.”
While the former Transport Minister Fikile Mbalula previously linked subsidies to improved governance and an end to violent infighting, operators rejected the R1.14 billion Covid-19 relief package due to registration and tax compliance requirements. Santaco insists inclusion in the subsidy regime is non-negotiable for survival.
2. Transitioning the SASSA SRD into a basic income grant
Civil society and political figures, including United Independent Movement (UIM) president Neil de Beer, have pushed for converting the R350 Social Relief of Distress (SRD) grant into a permanent Basic Income Grant (BIG).
In a detailed social media post, De Beer proposed a “poverty intervention 15-year plan” and a R4,000 monthly grant, arguing that systemic poverty demands long-term solutions.
Furthermore, advocates stress that the SRD’s temporary nature fails to address deepening inequality, with over 11 million beneficiaries reliant on the grant.
However, funding this expansion remains contentious. In an earlier undelivered budget draft, National Treasury proposed raising VAT from 15% to 17% to generate R58 billion for social grants and other expenditures.
The plan sparked fierce backlash, with critics calling VAT hikes regressive and harmful to low-income households. Amid political pressure, reports now suggest the government may settle for a smaller 0.5 percentage point VAT increase (to 15.5%) to partially fund grants. Economists warn even a modest VAT rise could deepen inequality, urging progressive taxation instead.
The final decision rests with Minister Godongwana, who must balance fiscal constraints against public demands for expanded social protection.
3. Tackling decaying municipalities and infrastructure
Public frustration over crumbling municipalities, epitomised by Johannesburg’s inner-city decay, has escalated. X user @Gabojust highlighted the urgency:
“The minister must have a blueprint on how to address the financial distress of decaying municipalities nationwide. This is a critical challenge to many citizens.”
UIM leader Neil De Beer echoed this, demanding “central oversight on all municipal budget and expenditure” to curb mismanagement. Ramaphosa’s 2024 budget allocated R265 billion for services like water, housing, and public transport, but critics argue more targeted interventions—and stricter accountability—are needed to revive local governance.
4. Public sector wage increases and social spending
Amid soaring inflation, public workers demand relief. An X user @Castrongobese urged:
“He must give public service workers a decent wage increase… More money should be redirected towards improving healthcare and education, and infrastructure to unlock economic growth.”
The 2024 budget allocated R480 billion to education and R272 billion to health, but unions warn that stagnant wages risk exacerbating brain drain in critical sectors.
Meanwhile, Ramaphosa’s R7.4 billion Presidential Employment Stimulus—which created 1.7 million jobs—remains a key pillar, though scalability is questioned.
5. Anti-corruption measures and governance overhaul
Corruption remains a central concern, with X user @mathibelle bluntly stating:
“Corruption, corruption, corruption… hold people accountable, surely service delivery would improve.” Neil De Beer proposed “life-style audits across the board on state employees” and “civilian oversight committees” to strengthen Treasury accountability.
Ramaphosa’s 2024 budget included additional anti-corruption funding, but critics insist tangible prosecutions and transparency are overdue.
6. Agricultural support and transformation
Agriculture, a R13.7 billion export sector employing over 1 million people, faces dual challenges: infrastructure bottlenecks and racial inequity. President Ramaphosa noted:
“Black farmers currently account for around 10% of commercial output… Our growth agenda must have a bias towards empowerment.”
The 2024 budget emphasized sectoral masterplans and a Land Bank-backed blended finance instrument to support emerging farmers. However, decaying roads, rail, and ports hinder progress, with structural reforms still in early phases.
7. Economic reforms: import taxes, local manufacturing, and green energy
To stimulate local industries, Neil De Beer proposed a 15% import tax on goods manufacturable domestically and tax rebates for mineral beneficiation.
Ramaphosa’s 2024 budget introduced electric vehicle (EV) manufacturing incentives and R2 billion for smart electricity meters to reduce load-shedding. De Beer also advocated for a “15% extra levy on mineral exports” to prioritise local processing—a move aligned with broader calls to review foreign trade agreements.
8. Job creation and poverty reduction through fiscal reallocation
Building on proposals by Build One South Africa (BOSA), redirecting savings from scrapping ineffective programs could unlock critical funds for job creation and poverty alleviation. BOSA acting spokesperson Roger Solomons highlighted in a statement:
“Shutting down non-essential State-Owned Enterprises (SOEs) has cost South Africa R2-trillion in lost output since 2010. Eliminating the ineffective Employment Tax Incentive (ETI) would save R6.6 billion, while reforming the Road Accident Fund (RAF) could save R20 billion by curbing fraud.”
These savings could expand the Presidential Employment Stimulus and fast-track a Basic Income Grant. Solomons stressed:
“This budget is a defining moment… to chart a new course toward fiscal responsibility and economic growth.”
9. Overhauling SOEs and the road Accident fund
BOSA’s call to systematically shutter underperforming SOEs—which consumed R400 billion in bailouts since 2010—resonates with demands to end fiscal drains.
Similarly, RAF reforms, including capping payouts for high-income earners, aim to save R20 billion annually. These measures align with President Ramaphosa’s pledge to prioritise “a government that works for its people” by redirecting funds to pressing social needs.
10. Urgent investment in early childhood development (ECD)
A staggering 90% of South Africa’s 220,000-strong ECD workforce—predominantly black women—earn below the minimum wage, while 57% of children in early learning programmes fail to “thrive by five” due to chronic underfunding.
Despite President Ramaphosa’s commitments since 2019 to expand access to ECD, funding remains precarious. Experts Daniel McLaren (Ilifa Labantwana) and Hopolang Selebalo (Smart Start) argue:
“Increasing the per-child ECD subsidy to R24 per day is essential to restore the purchasing power lost since 2019, when it was set at R17. This would enable programmes to invest in better facilities, nutrition, and fair wages for workers.”
The Department of Basic Education aims to subsidize 1.5 million children by 2027/28 and 2.3 million by 2030, achieving universal access. This requires retaining the proposed R10-billion budget allocation for ECD infrastructure, registration drives, and systems.
An ambitious ECD expansion could create 300,000 new jobs (mainly in townships and rural areas) and relieve childcare burdens for two million women, boosting economic participation.
11. Progressive revenue measures for equity
McLaren and Selebalo stress that social priorities like ECD must be funded through progressive taxation to address South Africa’s extreme inequality. They warn against austerity measures that disproportionately harm low-income households, urging the GNU to honour its electoral pledges:
“All GNU parties promised ECD expansion as a ‘key investment in the future of our country.’ This budget must deliver.”
12. Urgent SANDF Funding and Strategic Overhaul
The South African National Defence Force (SANDF) faces a deepening crisis, underscored by the deaths of 14 soldiers in clashes with M23 rebels in the Democratic Republic of Congo (DRC) earlier this year.
With thousands of SANDF personnel believed to have been deployed in high-risk peacekeeping missions such as the DRC, experts warn that chronic underfunding and outdated strategies have left the force overstretched and ill-equipped.
Key Challenges:
- Dwindling Capacity: The SANDF struggles to maintain aircraft, ships, and equipment, with defence spending at 0.73% of GDP—far below the global norm of 2%.
- Outdated Defence Reviews: The 2015 Defence Review, although never implemented, is obsolete in the face of modern threats like drone warfare and regional instability in Mozambique and the DRC.
- Strategic ambitions vs reality: Experts like defenceWeb editor Guy Martin – as quoted by Engineering News – argue South Africa must either fund the SANDF to match its continental peacekeeping ambitions or drastically scale back its mandate.
Proposed Solutions:
- New Defence Review: A revised review must address threats to national interests (for an example Cahora Bassa Dam, maritime trade routes) and align defence policy with modern warfare realities. “At present, the SANDF is completely overstretched and battling to meet its mandate, as can be seen by the capture of Goma by M23 rebels in January,” Martin said, adding: “It is also struggling to keep its aircraft flying, its ships at sea, and its equipment serviceable.”
- Budget increase: Raising defence spending to 1.5–2% of GDP could rebuild capabilities and stimulate the local defence industry, which currently survives on exports.
- Plan B: If funding remains stagnant, the SANDF risks becoming a “border guard” force, unable to project power or respond to regional crises.
Industry Impact: A revitalised SANDF could revive South Africa’s defence sector, creating thousands of jobs through local equipment upgrades and R&D in critical areas like electronic warfare and precision-guided munitions.
