January Financing Figures Point to Tighter Budget Ahead

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Cash reserves dip by R51 billion as long-term borrowing rises - but what does this mean for the upcoming Budget 2026?

South Africa’s fiscal position grew more constrained in January 2026, with government cash reserves taking a notable knock and borrowing increasing. The National Treasury’s Media Statement on the latest provisional financing report shows that while the state is still accessing capital markets, its financial cushion is shrinking.

• Cash Reserves Down by Over R51 Billion

  Government’s total cash balances dropped by R51.1 billion during January, leaving R259.3 billion in the bank. Of this, R105.2 billion is held in foreign currency deposits with the Reserve Bank, and R154.1 billion is held in commercial bank accounts. While these are still healthy figures in isolation, the monthly drop signals growing liquidity pressures.

• Long-Term Borrowing Ramps Up

  To meet financing needs, the state issued significant long-term debt in January. Net domestic long-term loans rose by R20.94 billion, reflecting increased bond issuance to cover redemptions and support cash flow. Gross bond issuance reached R22.2 billion for the month. By contrast, short-term borrowing contracted, with net domestic short-term loans falling by R390.8 million. This was mainly driven by a reduction in 273-day Treasury Bills, which were cut by R1.69 billion.

• Premiums In, Losses Out

  The National Revenue Fund recorded R1.67 billion in receipts, largely from premiums on bond transactions and debt restructuring. However, it also logged R275.4 million in payments, mainly from revaluation losses on foreign currency transactions and bond restructuring costs.

  No new foreign loans were taken in January, though the year-to-date net total remains high at R49.6 billion, mostly from large issuances in December.

📌 At a glance:

• Net long-term borrowing: ↑ R20.9 billion

• Cash reserves: ↓ R51.1 billion

• Treasury Bills (273-day): ↓ R1.69 billion

• Foreign loan activity: No new issuances in Jan, R49.6 billion YTD.

What Does This Mean for Budget 2026?

These figures land just weeks ahead of the much-anticipated Budget Speech. While they don’t suggest a fiscal crisis, they do signal limited flexibility heading into 2026:

• The sharp decline in cash balances points to tighter liquidity.

• Rising long-term borrowing suggests growing reliance on debt to meet fiscal commitments.

• Interest costs will likely increase, putting pressure on discretionary spending.

• Treasury may have less room for ambitious new programmes or tax relief measures.

A more detailed breakdown will be published in Treasury’s Monthly Statement of National Revenue, Expenditure and Borrowing on 27 February 2026.