The Western Cape Government (WCG) is encouraged by the 2025 Medium-Term Budget Policy Statement (MTBPS) tabled by the Minister of Finance, Enoch Godongwana, yesterday.
The MTBPS confirms encouraging fiscal and economic progress, underpinned by a sustained primary surplus, a narrowing fiscal deficit, and stabilising public debt-to-GDP levels, reflecting the disciplined fiscal coordination that has emerged under the Government of National Unity (GNU).
These are important steps to rebuild trust in South Africa’s public finances and to secure South Africa’s long-term economic stability. Minister Godongwana has committed to strengthening structural reforms in logistics, water, energy, and local government. These are areas of vital importance to provincial growth. However, greater urgency is required in implementing port, rail, and energy reforms to unlock the full potential of regional economies like the Western Cape, which depend heavily on trade, manufacturing, and tourism.
Premier Alan Winde welcomed the additional funding for education and health, as well as allocations under the Budget Facility for Infrastructure (BFI) for projects in Belhar and Klipfontein. “We will now engage the respective departments to ensure these funds strengthen long-term financial sustainability in these critical service delivery areas,” the Premier said.
The WCG notes the updates to the Provincial Equitable Share (PES) formula and, while this reflects progress, a further review is needed to ensure the formula more accurately accounts for rapid population and commensurate economic growth, to ensure that provincial governments are funded equitably. The WCG will continue to advocate for conditional grants to be phased into the PES to provide greater predictability and autonomy in provincial budgeting.
“While the national fiscal outlook is improving, fiscal prudence must not come at the cost of frontline services. It remains essential that provinces are adequately funded to maintain quality education, healthcare, and social services. We will continue to advocate for a funding model that recognises both the cost pressures faced by fast-growing provinces and the critical role they play in sustaining South Africa’s overall economic performance,” said Premier Winde.
South Africa’s fiscal outlook is stabilising, but stability alone is not progress. The real test lies in translating these macroeconomic improvements into tangible growth, private investment, and job creation that raise living standards and restore confidence in the economy’s future.
Premier Winde concluded, “We stand ready to work with National Treasury and all partners in government to build a fiscally sustainable path that supports strong economic activity, one where prudent budgeting goes hand in hand with bold investment. Our province will continue to act as a proof point of what is possible when reform is backed by discipline and execution.”
The WCG remains committed to expanding infrastructure investment, mobilising private capital, and accelerating the implementation of reforms in logistics, ports, and energy that are essential for export competitiveness, growth, and jobs.
Enquiries:
Media Liaison Officer to the Premier
Regan Thaw
Cell: 083 627 7246
E-mail: Regan.Thaw@westerncape.gov.za
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