South Africa’s 2026 Budget

WHAT IT MEANS FOR HIGHER EDUCATION AND SKILLS DEVELOPMENT

South Africa’s 2026 Budget Speech arrives at a time when government must balance fiscal discipline with the urgent need to address unemployment, particularly among young people. Against this backdrop, education and skills development remain central to the country’s long-term economic strategy.

In this year’s budget, Finance Minister Enoch Godongwana reaffirmed government’s commitment to protecting social spending while continuing efforts to stabilise public finances.

EDUCATION REMAINS THE LARGEST AREA OF PUBLIC SPENDING

Education continues to receive the largest share of government expenditure. According to the 2026 Budget Review, it accounts for roughly 23.7% of consolidated public spending over the medium term, reflecting its importance to South Africa’s development agenda.

Within the broader “social wage”, spending on education, health, and social protection represents over 70% of government expenditure, supporting millions of South Africans through schooling, healthcare, and social grants.
These figures are detailed in the Treasury’s budget highlights:

These allocations support:

13.6 million learners in the basic education system
26.5 million social grant beneficiaries
healthcare access for the majority of the population

Despite this significant commitment, fiscal constraints mean that increases across education programmes remain measured.

EXPANSION OF EARLY CHILDHOOD DEVELOPMENT

One of the notable announcements in the education sector was increased support for early learning.

Government has allocated R12.8 billion over the next three years to expand Early Childhood Development programmes, with the goal of supporting around 300,000 additional children.

Further information on this initiative can be found in the education sector summary of the national budget. Investment in early childhood development is widely recognised as one of the most effective ways to improve long-term educational outcomes and labour market participation.

CONTINUED PRESSURE ON HIGHER EDUCATION FUNDING

Higher education funding remains substantial, but the pressure on the system continues to grow.

The National Student Financial Aid Scheme will receive approximately R54.3 billion in the current financial year to support students from low-income households. Rising demand for financial support and ongoing operational challenges continue to place pressure on the student funding system.

Discussion around NSFAS funding and sustainability has featured prominently in media coverage and policy discussions following the budget. As enrolment expands while fiscal resources remain constrained, the role of private-sector bursaries and alternative funding models is likely to grow.

ECONOMIC OUTLOOK AND FISCAL CONSOLIDATION

The budget also reflects continued efforts to stabilise South Africa’s public finances.

Government plans include spending reprioritisations of roughly R12 billion, while attempting to protect essential social services. The fiscal framework also projects that public debt will peak at approximately 78.9% of GDP before gradually declining.

Economic growth projections remain modest:
• 1.6% GDP growth expected in 2026
• Gradual improvement toward around 2% by 2028

At the same time, unemployment remains one of the country’s most pressing structural challenges, with the rate still above 30%, particularly affecting young people entering the labour market.

IMPLICATIONS FOR THE EDUCATION ECOSYSTEM

The 2026 Budget reinforces several important realities for the higher education and skills development ecosystem.

First, government will continue to prioritise education spending, but fiscal space remains constrained. Public funding alone cannot meet the growing demand for higher education support.

Second, there is increasing emphasis on ensuring that education funding produces measurable outcomes. Completion rates, graduate employability, and programme effectiveness are becoming critical indicators of impact.

Third, the private sector will play a growing role in bridging the gap between education and employment. Corporate bursaries, internships, mentorship programmes, and structured student support initiatives are becoming increasingly important components of the broader education ecosystem.

FROM ACCESS TO OUTCOMES

Over the past decade, South Africa has made meaningful progress in expanding access to tertiary education. The next challenge is improving outcomes.

Ensuring that students complete their qualifications and transition successfully into the workforce requires more than financial support alone. Academic support, mentorship, career readiness programmes, and effective programme management all play a role in improving student success.

As the funding environment becomes more constrained, the focus will increasingly shift from simply funding access to ensuring that investment in education produces tangible economic and social returns.

FINAL THOUGHTS

The 2026 Budget Speech highlights the delicate balance government must maintain between fiscal discipline and social investment.

Education remains a clear priority, but the scale of demand means that partnerships between government, universities, and the private sector will become increasingly important.

For organisations investing in education and skills development, the opportunity lies in moving beyond funding alone toward building structured programmes that support students throughout their academic journey and into employment.

At Excel@Uni, we see this shift unfolding across the sector as more organisations focus on ensuring that their investment in students translates into real outcomes, graduation, employability, and long-term economic participation.