Godongwana’s mini budget: not one word on AGOA or China

Finance Minister Enoch Godongwana tabled his Medium-Term Budget Policy Statement in Parliament on Wednesday 21 October 2026. He said that government debt has stopped growing as a share of the economy for the first time in nearly 2 decades. He also cut the fuel levy from 4 November. Daily Maverick called it the most promising and plausible mini budget in years.

Yet the timing tells a second story. Two days before the speech, President Cyril Ramaphosa told editors and journalists that South Africa must prepare for losing duty-free access to the US market under AGOA. Meanwhile, imports from China are rising fast and factories are shedding jobs. The published speech runs to about 4 700 words. It never mentions AGOA, China or tariffs. The United States comes up once, as the country that attacked Iran and pushed up the oil price.

What was expected

The economists expected a weaker growth forecast, because the economy shrank by 0.2% between April and June. They also expected a tax windfall from gold and other precious metals. PSG’s chief economist, Johann Els, put the overrun at R50 billion or more. Bank of America put it at up to R70 billion.

On the morning of the speech, Anri Brink of Absa Investments named the risk the markets feared most. She told Newzroom Afrika that a key downside would be if the excess revenue went to additional spending.

The unions wanted more than good numbers. Cosatu wanted fuel relief, a jobs stimulus and a higher grant for the unemployed. Its parliamentary coordinator, Matthew Parks, set the tone.

“This MTBPS cannot be business as usual, nor can we afford to continue to normalise the abnormal.”

Matthew Parks, Cosatu, via TimesLIVE

Keith Engel of the South African Institute of Taxation asked whether the promise of no new taxes this year would survive anaemic growth, a fuel shock and two rate hikes.

What he delivered

First, growth. Godongwana cut the forecast for 2026 to 1.2%, down from 1.6% in February. He blamed the war that followed when Israel and the United States attacked Iran, which closed the Strait of Hormuz. He also said that growth remains too low.

Second, revenue. Tax collections are R17.1 billion above the February estimate, mainly because mining companies paid more tax on higher commodity prices. That is well short of what some economists expected. He also warned that these gains are expected to fade over the next few years.

Third, spending. The speech says the extra revenue means government can spend R45.5 billion more than it planned in February. In Parliament he then added a line that is not in the published text.

“You must tell them no there are no budget cuts, their budget increases.”

Enoch Godongwana, National Assembly, 21 October 2026

Then, debt. Here the news is good, and I give him credit for it. Debt stabilised at 78.4% of GDP in 2025/26, slightly better than the 78.9% promised in February. The deficit narrows to 4.3% this year. In an interview with Daily Maverick, Treasury Director-General Duncan Pieterse said that South Africa’s 10-year bond yield is now close to Mexico’s. Mexico is rated investment grade.

The document also flags 4 323 high-risk cases of suspected ghost workers on the state payroll. In addition, it finds R13 billion in savings over 3 years by cutting fraud in social grants.

Fuel relief, and a prayer

From 4 November to 1 December, the fuel levy drops by R3 a litre on diesel and R1.50 on petrol. After that, until 5 January, it drops by R1.50 on diesel and R1 on petrol. That is smaller than the April to June cut of R3 on both, which cost R17.2 billion. This round is capped at R10 billion.

Petrol 95 in Gauteng already sits at a record R30.25 a litre. The National reported on 20 October that early Central Energy Fund data pointed to a November petrol increase of about R2.05 a litre. If that holds, the R1.50 cut will not cover it. The relief starts on election day. To be fair, 4 November is also the first Wednesday of the month, when the fuel price changes anyway.

Before the speech, reporters asked how the Treasury recovers the lost fuel revenue. TimesLIVE reported his answer.

“We don’t have an instrument to recover whatever money we forfeit. We pray.”

Enoch Godongwana, via TimesLIVE

Investment: the Treasury’s own number

In the speech, Godongwana said his reforms are crowding in private investment. However, Reuters reported that the Treasury’s own policy statement shows private investment fell by 1.1% in the first half of 2026. Investment by the state and its companies rose by 5.2%. In other words, the state built while business held back.

The Treasury blames oil prices and uncertainty. It expects private money to follow as electricity, ports and rail open up. Much of its plan depends on that, from 68 public-private partnerships to an infrastructure agency with projects of more than R207 billion.

AGOA: 12 days to the deadline

AGOA, the African Growth and Opportunity Act, lets thousands of South African products into the US without duty. Congress extended it to 2028. But each year the US president decides which countries stay in, and a removal from 1 January must be announced by 2 November. Reuters quoted him on what that means for South Africa.

“I need, as president, to prepare us if it ever happens.”

Cyril Ramaphosa, 19 October 2026

He also said the impact on jobs would be devastating. The motor industry carries most of the risk. According to the automotive body Naamsa, 86 000 jobs at vehicle makers are tied to AGOA, and 125 000 with suppliers. The US already charges 25% on cars, parts, steel and aluminium. Since July, a further 12.5% applies to other South African goods. As the Sunday Times reported, vehicle exports to the US fell from about R17.7 billion in 2024 to R8 billion in 2025.

Godongwana knows the stakes. In July 2025, on Bloomberg Television, he said that losing a trading partner such as the USA would have a major impact and create more unemployment. Even his 2025 mini budget discussed US tariffs. This year, the closest he came was one sentence: domestic activity has lost momentum, especially in export-linked sectors.

The ANC-led government calls the US claims about white South Africans false. However, Washington put its reasons in writing. Executive Order 14204 of February 2025 names the Expropriation Act, the case against Israel at the International Court of Justice and ties with Iran. Those are policy choices, and the budget does not put a cost on them.

China: trade that runs one way

Ramaphosa’s answer to losing the US is to sell elsewhere, and he named China. China dropped its tariffs to zero on qualifying South African goods in May. But the trade is already lopsided.

According to Industrial Development Corporation figures in Business Day, South Africa sold R164 billion of goods to China between January and September 2025. It bought R302 billion. That is a gap of R136.6 billion in 9 months. Bloomberg reported that shipments from China rose by 29% in the first 8 months of 2026. China now supplies more than a third of our manufactured imports, and takes about 5.9% of our exports.

Factories feel it. Manufacturing shrank for a third quarter in a row up to June. Stats SA’s Quarterly Employment Survey shows that manufacturing lost 20 000 jobs between March and June. Across the formal economy, 95 000 jobs went in the year to June. Official unemployment stood at 33.6%.

“You don’t see the appetite from government to actually protect local industry, and yet they continue to talk about industrialisation and beneficiation.”

Busi Mavuso, Business Leadership South Africa, to Bloomberg

Not everyone wants import duties, though. Sello Takatso of Nedbank told Radio 702 that tariffs are a temporary fix, not a permanent one. Still, the speech offered neither view. SARS got a paragraph on illicit alcohol and tobacco. Cheap imports and the factories that compete with them got none.

My view

So did Godongwana deliver what was expected? On the government’s books, mostly yes. Debt has stopped rising, the deficit is shrinking, and he paid for fuel relief without new borrowing.

But the expectations that matter for jobs were missing from the speech. South Africa is 12 days from a US deadline that touches up to 125 000 motor industry jobs. Meanwhile, Chinese imports are rising and factories are losing jobs. Stable debt helps the government borrow. On its own, it keeps no factory open. If Washington wants South Africa out of AGOA from January, it has to say so by 2 November. Two days later, you vote.

If a detail in this story is wrong

I tell these stories from the public record. I am not a journalist, and I cannot place your story on the record. So if you believe a detail is wrong, contact the outlet that published it. Only the media can correct the public record. You can still send me the full story through my website.

Sources

• Enoch Godongwana, Medium-Term Budget Policy Statement speech, 21 October 2026, full text via Daily Maverick: dailymaverick.co.za; delivered speech via the SABC News livestream: youtube.com
• Daily Maverick, ‘Rising revenue allows for fuel levy relief, El Niño readiness in Godongwana’s mini-budget’, 21 October 2026: dailymaverick.co.za
• Sowetan (Reuters), Stella Mapenzauswa, ‘Treasury cuts 2026 growth forecast but says economy shows resilience’, 21 October 2026: sowetan.co.za
• TimesLIVE, Khulekani Magubane, ‘MTBPS 2026: Godongwana provides fuel price relief again, but at what cost?’, 21 October 2026: timeslive.co.za
• TimesLIVE, ‘MTBPS expectations point to pump, price pressures’, 21 October 2026: timeslive.co.za
• Business Day, ‘Will Godongwana’s tax pledge survive medium-term budget?’, 19 October 2026: businessday.co.za
• Gauteng.net, ‘Mini-Budget 2026: Godongwana to table MTBPS today’, 21 October 2026: gauteng.net
• The National, ‘Oil shock raises pressure on Godongwana ahead of 2026 MTBPS’, 20 October 2026: thenational.co.za
• Moneyweb, ‘Godongwana slashes fuel levies’, 21 October 2026: moneyweb.co.za; ‘Government flags 4 323 suspected ghost workers on state payroll’, 21 October 2026: moneyweb.co.za
• IOL (AFP), ‘Ramaphosa warns South Africa to prepare for loss of US-Africa trade deal’, 21 October 2026: iol.co.za
• CNBC Africa (Reuters), ‘South Africa must prepare for potential loss of US trade benefits, president says’, 19 October 2026: cnbcafrica.com
• Sunday Times, ‘Trump signs two-year Agoa deal, nowhere near SA’s 15-year target’, 4 September 2026: timeslive.co.za
• Center for Global Development, ‘Tariff Whiplash in Africa: What Happened and What’s to Come’: cgdev.org
• IOL, ‘Donald Trump’s tariffs could cost South Africa 100,000 jobs’, 18 July 2025: iol.co.za
• TimesLIVE, ‘MTBPS 2025: Godongwana beats reform drum as US tiff hobbles investment’, 12 November 2025: timeslive.co.za
• The White House, Executive Order 14204, ‘Addressing Egregious Actions of the Republic of South Africa’, 7 February 2025: whitehouse.gov
• Moneyweb (Bloomberg), ‘SA factories crater as China imports stunt revival’, 13 October 2026: moneyweb.co.za
• Business Day, ‘SA’s vehicle trade deficit with China and India hits R90bn’, 26 May 2026: businessday.co.za
• BusinessTech, ‘95,000 more jobs lost in South Africa’ (Stats SA Quarterly Employment Survey, Q2 2026), 29 September 2026: businesstech.co.za
• Stats SA, Quarterly Labour Force Survey, Q2 2026: statssa.gov.za; SAnews, ‘GDP records 0.2% contraction in second quarter’, 8 September 2026: sanews.gov.za
• Clips with sound: SABC News (21 October 2026); Firstpost (20 October 2026, Cyril Ramaphosa): youtube.com; Newzroom Afrika (21 October 2026, Anri Brink): youtube.com; PolitySA (19 October 2026, Investec): youtube.com; WION (14 October 2026): youtube.com; Al Jazeera English (1 May 2026): youtube.com; Radio 702 (13 October 2026, Sello Takatso): youtube.com. Used for news reporting and commentary.
• Screenshots of the speech, reports and statements are used for news reporting and commentary.