Understanding the budget process

Ahead of Finance Minister Enoch Godongwana’s 2026 Budget Speech on 25 February 2026, the Chairperson of the Financial and Fiscal Commission (FFC), Dr Nombeko Mbava, explained in simple terms how the national budget process begins.

The FFC is an independent body created by the Constitution to make sure government spends public money fairly and responsibly.

“Fiscal” simply refers to government money – especially how it is raised through taxes and how it is spent.

The Commission helps protect democracy by ensuring provinces and municipalities receive enough funding to provide basic services such as education, healthcare, housing and water.

Through research and independent recommendations, the FFC makes sure that public money is shared based on real needs and facts – not politics.

“The roles and responsibilities of the FFC are clearly set out in the relevant legislation, in particular the Constitution and the Intergovernmental Fiscal Relations Act. In terms of this framework, the budget process formally begins with the Commission’s recommendations,” she explained.

Influencing the budget 

For the 2026 Budget, Mbava said the FFC tabled its Annual Submission at the end of May 2025. Thereafter, the Commission briefs all nine provincial legislatures, parliamentary committees and the South African Local Government Association on its recommendations.

“When the Minister tables the 2026 Budget this month, the FFC again will make a formal budget submission, setting out its recommendations with research justifications to Parliament,” Mbava explained.

During the 2025 budget process, the FFC strongly advised against the proposed VAT increase based on its research and analysis.

VAT (Value-Added Tax) is a tax added to most goods and services that people buy, such as food, clothing and electricity. 

When VAT increases, the prices of these goods and services also increase.

The FFC’s research showed that increasing VAT would hit low-income households the hardest and would not raise enough extra revenue to meet government's targets.

More recently, the Commission warned that rising inflation affects how much money government has available to spend. It recommended that government departments plan and spend more carefully, making sure budgets match real price increases and available income.

Focus on living conditions 

The Budget shows government’s plan to improve the living conditions of South Africans. It is guided by the Medium Term Development Plan, a five-year strategy focused on growing the economy, creating jobs, reducing inequality and strengthening the capacity of the state to deliver services.

For more information about the FFC visit www.ffc.co.za  

When is the Budget Speech?

Minister of Finance Enoch Godongwana will table the 2026 National Budget in Parliament on 25 February 2026.

South Africans can watch the 2026 Budget Speech live on South African Government social media platforms and follow updates using #Budget2026 and #GovZAUpdates.