MTBPS 2026: 'Encouraging shift toward fairer fiscal allocation for Metros' -- Cape Chamber

The Cape Chamber of Commerce and Industry welcomes key revisions to the intergovernmental fiscal framework that directly address long-standing revenue concerns in the Western Cape.  

The revisions formed part of the 2026 Medium-Term Budget Policy Statement (MTBPS) delivered in Parliament on Wednesday by Finance Minister Enoch Godongwana, who also introduced a temporary fuel levy reduction to cushion businesses against logistics shocks. 

National Treasury has revised allocations upward for municipal levels of government, marking a primary takeaway for regional commerce. The MTBPS projects an increase in the Local Government Equitable Share alongside a boosted fuel levy sharing allocation for metropolitan municipalities. 

These adjustments directly respond to core structural issues long flagged by Western Cape Premier Alan Winde and the Provincial Treasury. Regional government leadership has consistently cautioned that rigid fiscal formulas fail to reflect the Western Cape's rapid population influx, putting unsustainable strain on frontline services, municipal infrastructure, and urban roads. 

Andrew Donaldson, Cape Chamber’s Public Institutions Business Environment Committee vice chairperson, describes the fiscal recalibration as potentially positive:  "The Chamber notes the upward adjustment in fuel levy sharing with metros next year, and the increase in the local government equitable share," says Donaldson, a former National Treasury Deputy Director-General. 

The additional transfers should provide much-needed capital to the City of Cape Town and regional municipalities, helping fund local road maintenance, infrastructure expansion, and municipal service efficiency without forcing aggressive tariff hikes on local businesses. 

While welcoming the principle-based entrenchment of a fiscal anchor, Donaldson says the real test is implementation – and outcome: “The real sustainability test, of course, is how fiscal and other policies contribute to growth and future budget improvements.” 

The Chamber also welcomes the temporary R10 billion fuel levy reduction to ease operating pressure across transport-heavy supply chains.  The temporary fuel relief comes as the Cape Chamber continues to highlight the compounding impact of volatile fuel prices and transport friction on local economic competitiveness. 

Transport costs were a notable discussion point at a recent Chamber Strategic Dialogue Network (SDN) earlier this year. The SDN platform brought together key corporate leaders, transport operators, and government stakeholders. Topics included potential digital traffic management, integrated public transport corridors, and accelerating road-to-rail freight migration.