Business Leadership SA says only way forward is to reduce state expenditure

BLSA CEO Busisiwe Mavuso at a press conference

As South Africa awaits Finance Minister Enoch Godongwana’s re-tabling of the national budget on 21 May 2025, Business Leadership South Africa (BLSA) has urged the government to make bold economic decisions that stimulate growth and enable sustainable public spending.

According to eNCA, BLSA CEO Busisiwe Mavuso said the government must show “political courage” by making difficult and potentially unpopular spending cuts, particularly in areas that do not support economic productivity.

“We must escape the low-growth trap we have been in for a decade and a half.”

Mavuso further told Engineering News that sustainable public spending can only be achieved through growth that generates revenue. “Without decisive reforms, government debt will deepen and so will the country’s economic woes,” she warned.

 

Reuters reports that the original 2025 budget, tabled in February, had proposed a two-percentage-point VAT increase, a move aimed at raising additional revenue. However, political pressure within the coalition forced the Treasury to revise its proposal to a one-point increase over two years. Even this watered-down measure was met with resistance, prompting further delays and a new budget date.

South Africa’s Finance Minister Enoch Godongwana delivers his 2025 budget speech in Cape Town, South Africa, 12 March 2025. REUTERS

The upcoming budget re-tabling is expected to address rising debt, a growing public wage bill, and the underperformance of state-owned entities. According to The Citizen, BLSA believes the government should instead prioritize spending that “delivers economic returns.”

Mavuso pointed to the need for spending discipline and noted that “cutting expenditure is not about austerity, but about allocating limited resources to areas with real returns on investment.” She reiterated the need to abandon populist delays and make realistic trade-offs.

With the economic outlook remaining fragile and business confidence fluctuating, analysts suggest the May 21 budget will be a critical opportunity to restore investor trust and stabilize fiscal policy.