South Africa's National Treasury published a keynote address by Deputy Minister of Finance Dr David Masondo outlining the government’s growth agenda centred on lowering the cost of doing business and maintaining macroeconomic stability, and confirming that the inflation-targeting regime is under review. Technical work by National Treasury and the South African Reserve Bank (SARB) indicates the current 3 to 6 percent inflation target range is too wide and should be narrowed, with the Macroeconomic Standing Committee (MSC) due to submit recommendations to the Minister of Finance and the SARB Governor. The address linked lower borrowing costs to debt sustainability, citing a primary budget surplus maintained over the past three years, and set out structural reforms under Operation Vulindlela across energy, logistics, water, telecommunications and the visa system. Measures highlighted include enabling private investment in electricity generation since 2021, steps toward private investment in transmission through Independent Transmission Projects, work toward a competitive wholesale electricity market following the Electricity Regulation Amendment Act (January 2025), open access to the freight rail network with 11 approved train operating companies, and new bodies to support bulk water infrastructure investment. On infrastructure delivery and financing, the speech stated that government will spend more than ZAR 1 trillion on public infrastructure over the next three years and is mobilising private participation through revised public-private partnership rules, including removing National Treasury approval for projects below ZAR 2 billion, alongside a Credit Guarantee Vehicle expected to be operational by July 2026. On anti-money laundering and counter-terrorist financing, the address reported that South Africa has substantially completed all 22 Financial Action Task Force action-plan items and that an on-site assessment visit concluded at end-July, ahead of an October 2025 plenary decision on potential removal from the grey list. Preparations were also flagged for the next mutual evaluation, due to commence in early 2026 under an updated methodology with greater emphasis on effectiveness.
National Treasury (South Africa) 2025-09-09
South Africa's National Treasury signals narrower inflation target range as SARB-Treasury committee prepares recommendations
South Africa's National Treasury, via Deputy Finance Minister Dr. David Masondo, outlined a growth agenda to reduce business costs and maintain macroeconomic stability, reviewing the inflation-targeting regime. The current 3 to 6 percent inflation target is considered too wide, with recommendations expected from the Macroeconomic Standing Committee. The address also highlighted structural reforms in energy, logistics, and infrastructure, and progress in anti-money laundering efforts, with South Africa nearing completion of all Financial Action Task Force action-plan items.