2025 Budget Speech: What It Means for South Africa’s Youth

The 2025 Budget Speech by Finance Minister Enoch Godongwana set the tone for South Africa’s economic direction in the coming year. While the budget prioritizes economic stability, infrastructure development, and social protection, young people will be asking: Will this budget create jobs, support education, and improve their future prospects?

Let’s break down the key takeaways and assess the real impact on South African youth.

1. Economic Growth and Job Creation: A Slow Recovery

One of the biggest concerns for young people is unemployment, which remains stubbornly high. The government acknowledges that economic growth has been sluggish, with GDP growth projected at just 1.8% over the medium term—far below what’s needed to create mass employment.

Government’s Plan:

Over R1 trillion will be spent on infrastructure projects over the next three years, focusing on transport, energy, and water.

PRASA rail upgrades aim to improve commuter transport and create jobs.

Private-sector partnerships with Transnet could lead to new jobs in logistics, ports, and rail.

Operation Vulindlela Phase 2 will continue tackling barriers to economic growth, such as energy shortages, inefficient transport, and visa restrictions.

While these projects could create jobs, infrastructure development takes time. Youth employment needs short-term solutions, like direct job programs, entrepreneurship funding, and incentives for companies to hire young workers. This budget lacks clear commitments to addressing the immediate job crisis faced by many young people.

2. VAT Increase: The Cost of Living is Going Up

The most controversial announcement was the increase in VAT from 15% to 15.5% in 2025/26, and to 16% in 2026/27. This means the cost of everyday items will rise, making life more expensive for low-income and unemployed youth.

Government’s Attempt to Cushion the Blow:

More food items (canned vegetables, dairy blends, and certain meats) are now VAT-free.

No fuel levy increase, saving consumers about R4 billion.

Even with these measures, a VAT increase affects everyone, particularly students, unemployed youth, and those earning low wages. Instead of raising VAT, the government could have looked at alternatives, such as wealth taxes or cracking down harder on tax evasion.

3. Social Grants and Income Support: Temporary Relief, Long-Term Uncertainty

Many unemployed youth rely on the R350 Social Relief of Distress (SRD) grant, which has been extended until March 2026. However, there’s no clear long-term plan for permanent income support.

Other Social Grant Increases:

Child support grant increases by R30 to R560/month.

Foster care grant rises by R70/month.

While the SRD grant extension is welcome, it’s only a short-term fix. Government has promised a new permanent income support system for the unemployed, but details remain unclear. With youth unemployment at over 40%, the focus should be on creating sustainable jobs, not just temporary relief.

4. Education: More Teachers, But No Mention of NSFAS

A well-funded education system is key to empowering the youth, and the budget includes some positive developments:

What’s Funded?

R19.1 billion to keep 11,000 teachers in classrooms.

R10 billion for Early Childhood Development (ECD) to increase subsidies and expand access for 700,000 more children.

Funding for 800 post-community service doctors to strengthen the healthcare workforce.

What’s Missing?

No mention of NSFAS or additional tertiary education funding, which could leave university students struggling with rising costs.

The focus on early education and retaining teachers is positive, but the lack of new funding for NSFAS is a red flag. With the cost of higher education rising, many students could find themselves in financial distress.

5. Digital Access and Skills Development: A Step in the Right Direction

In a digital world, affordable internet access is crucial. The budget highlights that:

Data costs have dropped by 51% since 2020, making it cheaper for students and entrepreneurs to go online.

Visa reforms are being introduced to attract skilled workers, which could create opportunities for youth in the tech sector.

Lower data costs are a win for young people, especially those in online learning, digital entrepreneurship, and remote work. However, more investment is needed in digital skills training to prepare youth for future jobs.

6. Public Sector Employment: A Chance for Young Professionals?

An early retirement plan (R11 billion) will encourage older public servants to leave, making space for younger hires.

A review of 100+ labour market programs aims to improve job opportunities.

If properly implemented, this could open up government jobs for young professionals. However, government jobs are limited, and the private sector needs to do more hiring too.

7. Crime, Corruption, and Governance: Will This Budget Fix the System?

The budget allocates more funding to fight financial crimes and will conduct an audit of “ghost workers” in government.

Fighting corruption is essential because stolen funds could be used to support youth programs. However, the real challenge is whether these anti-corruption measures will be properly enforced.

8. Infrastructure Development: Can It Transform Cities?

R402 billion for transport and logistics.

R219 billion for energy projects.

R156 billion for water and sanitation.

Local government funding will increase to R115.7 billion for free basic services to 11.2 million households.

Better infrastructure can improve urban living conditions for young people, making transport cheaper and services more reliable. However, government must ensure funds are used efficiently to prevent delays and corruption.

Final Verdict: Is This Budget Youth-Friendly?

✅ Positives:

1. Infrastructure projects could create jobs in transport, energy, and water sectors.

2. Cheaper data costs make internet access more affordable.

3. The R350 SRD grant continues as a temporary relief measure.

4. More funding for teachers and early education.

❌ Negatives:

1. No direct increase in NSFAS or tertiary education funding.

2. VAT increase makes life more expensive for young people.

3. Job creation efforts are slow, and unemployment remains high.

4. No strong commitment to youth-focused entrepreneurship programs.

Conclusion :

The 2025 Budget Speech is a step in the right direction in terms of infrastructure and social spending, but it falls short of addressing the immediate job crisis faced by young people. While long-term projects are essential, young South Africans need urgent interventions—from youth-focused employment programs to entrepreneurship support and affordable higher education.

If the government truly wants to help the youth, it must go beyond economic stability and invest in direct job creation, innovation, and skills development. Otherwise, the youth might continue to struggle while waiting for promises to turn into action.

What do you think?

Will this budget improve your life? Or is it missing key elements to support the youth? Drop your thoughts in the comments!