Budget Speech 2025: What Finance Minister Enoch Godongwana Must Prioritize for Growth

As Finance Minister Enoch Godongwana prepares to deliver the 2025 Budget Speech, experts are urging him to prioritize policies that stimulate economic growth, reduce inefficiencies, and create a conducive environment for businesses. Andrew Bahlmann, CEO of Corporate and Advisory at Deal Leaders International, emphasizes the need for a balanced approach that supports public services while fostering private sector growth.

Cut Inefficiencies and Reduce the Tax Burden

Bahlmann highlights the inefficiencies in South Africa’s public sector, including high administrative costs, duplicated programs, and underperforming state-owned enterprises (SOEs) like Eskom, Transnet, and South African Airways (SAA). He calls for significant budget cuts in these areas, suggesting a reduction in the number of municipalities and provincial governments to streamline operations.

“Cutting funding to loss-making SOEs and focusing on privatization or public-private partnerships (PPPs) could free up significant funds,” Bahlmann said. “This would reduce the financial burden on taxpayers and redirect resources toward more productive investments.”

Invest in Critical Infrastructure

While cutting wasteful spending is essential, Bahlmann warns against reducing investment in infrastructure. “Infrastructure projects like roads, ports, and digital networks are critical for job creation and economic growth,” he explained. “These investments not only create jobs but also enhance the business environment by improving logistics and communication.”

Strengthen SARS to Boost Revenue

Bahlmann supports the proposed R3.5 billion investment in the South African Revenue Service (SARS) to improve tax collection efficiency. “This is a smart, long-term strategy,” he said. “By strengthening SARS’ capacity to track down tax evasion and improve collection systems, the government can expand the tax base and increase compliance without raising tax rates.”

He noted that South Africa’s large informal economy and widespread tax evasion present significant opportunities for revenue growth. “This investment will likely result in higher tax collections, ultimately generating more revenue for essential public services,” he added.

Focus on Skills Development and Education

Bahlmann stresses the importance of investing in education and vocational training to equip the workforce with the skills needed in a rapidly changing global economy. “A skilled workforce is essential for attracting investment and driving innovation,” he said. “Prioritizing education and training will create long-term economic benefits.”

Balance Fiscal Discipline with Growth

To avoid excessive borrowing, Bahlmann calls for a balanced approach that combines fiscal discipline with targeted investments in growth sectors. “Minimizing tax increases while ensuring government policies remain conducive to business growth is critical,” he said. “These policies will attract foreign capital and support local businesses by creating a level-playing field and reducing regulatory risks.”

As South Africa navigates a challenging economic landscape, the 2025 Budget Speech presents an opportunity to lay the foundation for sustainable growth. By cutting inefficiencies, investing in infrastructure, strengthening SARS, and prioritizing skills development, Finance Minister Enoch Godongwana can create a more resilient and dynamic economy.

The success of these measures will depend on their implementation and the government’s ability to strike the right balance between fiscal responsibility and strategic investment. For South Africans, the hope is that this budget will mark the beginning of a new era of economic recovery and prosperity.

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