Note: This article has been written on the basis of documents provided to the media during the 2025 Budget lock-up prior to the cancellation of the Budget Speech on February 19. The National Treasury has lifted the embargo imposed on the information, but a new Budget is now due to be tabled on March 12.

To enhance productivity, competitiveness and the green economy, government will spend R18.4-billion over the medium term to support businesses through various incentive programmes under the Department of Trade, Industry and Competition (dtic), Finance Minister Enoch Godongwana's undelivered 2025 Budget documents revealed.

These programmes include the automotive investment scheme, business process outsourcing, film and television production incentives, special economic zones, clothing and textile competitiveness programmes, the industrial park revitalisation programme and industrial development support for electric vehicle production.

Meanwhile, the Department of Small Business Development has been allocated R2.1-billion over the medium term to support about 120 000 competitive small businesses, particularly those owned by women, youth and persons with disabilities in marginalised areas such as townships and rural regions.

In addition, government allocated R313.7-million over the medium term for the establishment of small, medium-sized and microenterprise hubs to support business expansion.

EMPLOYMENT
Godongwana noted South Africa’s low employment rate and mentioned regulatory reforms underway to address it, along with R4.6-billion allocated in the 2025/26 Budget for public employment programmes.

He said that the pace of employment growth was expected to have slowed in 2024, with average growth for the first three quarters at 2.2% compared with an average of 6.2% in 2023. Although employment reached an all-time high of 16.9-million people in the third quarter of 2024, the year-to-date average unemployment rate of 32.8% exceeds the long-term average of 27.5% as labour force growth outpaces economic growth.

However, over the medium term, employment growth was expected to increase gradually, in line with GDP, Godongwana said.

South Africa’s employment rate – the percentage of the working-age population that is employed – was about 40%, far below the global average of 55% to 65%. Compared with similar economies, South Africa had low levels of agricultural employment, self-employment and informal economic activity. Addressing this challenge required stronger economic growth, and labour demand and absorption, Godongwana said.

He said that several regulatory obstacles were hindering South Africa’s ability to create jobs and that amendments to labour market regulations would be made to boost employment. These amendments had been considered by the National Economic Development and Labour Council.

Godongwana said that the reform process was centred on simplifying labour regulations – including hiring and dismissal, enhanced protections for vulnerable workers and greater flexibility – with a particular focus on small businesses.