By ONM Reporter
With local government elections approaching, South Africa’s Medium-Term Budget Policy Statement (MTBPS) has brought the cost of government debt into sharp focus, raising fundamental questions about economic priorities while essential services remain under pressure.
For Muslims, the statement delivered on Wednesday, 21 October, raises questions that extend beyond fiscal management. They concern riba, economic justice and a financial system that places enormous interest obligations alongside the needs of hospitals, schools and vulnerable communities.
These questions should inform scrutiny of election promises. Municipal performance matters, but promises of better service delivery must also be examined against the wider financial structures that constrain public spending. Changing representatives does not, by itself, change those structures.
The central concern is stark: the government’s February budget projected debt-service costs equivalent to more than R1 billion a day for the current financial year. This exposes the enormous cost of an interest-dependent financial system in a country struggling with poverty, unemployment, crime and pressure on essential services.
From an Islamic perspective, the issue extends beyond balancing government accounts. It challenges the foundations of a system built around riba — interest or usury prohibited in Islam — and asks whether the economy serves society or increasingly requires society to serve its creditors.
The billion-rand daily burden
National Treasury’s February 2026 Budget projected debt-service costs of R432.4 billion for the 2026/27 financial year. This amounts to approximately R1.18 billion a day, R8.3 billion a week or R36 billion a month.
These are averages rather than identical cash payments made each day. Debt-service costs principally reflect interest and related costs, rather than repayment of the full outstanding debt.
For perspective, the same February budget allocated R310.4 billion to health — R122 billion less than projected debt-service costs. These figures illustrate the scale of the burden, although reducing interest costs would not automatically translate into equivalent increases in frontline spending.
In Wednesday’s MTBPS speech, Finance Minister Enoch Godongwana said government debt had stabilised relative to economic output. Treasury’s stated approach is to increase the primary surplus — revenue remaining after non-interest expenditure — to reduce borrowing and contain debt-service costs. It also outlined proposed legislation to strengthen fiscal accountability.
These measures deserve scrutiny on their merits. However, reducing the cost of interest-bearing debt is not the same as moving away from riba.
Existing borrowing also creates contractual obligations that cannot simply be wished away. The challenge is therefore both immediate and structural: managing existing liabilities responsibly while confronting continued dependence on interest-based financing.
Debt-service costs constrain the resources available for other priorities. They are not, however, the sole explanation for failing services. Corruption, waste, weak administration and neglected infrastructure also demand accountability.
Islam’s warning against riba
Justice, accountability and the equitable circulation of wealth are central principles of economic governance in Islam.
The Qur’an declares: “Allah has permitted trade and forbidden riba.” (Surah Al-Baqarah, 2:275)
This prohibition cannot be reduced to a personal preference about banking. It forms part of a wider economic order in which financial activity remains subject to divine limits, rather than treating profitability or market acceptance as the ultimate measure of legitimacy.
Islam permits profit through lawful trade, investment and enterprise. It prohibits riba even when interest-bearing transactions are legally enforceable or economically convenient.
Public wealth is also an amaanah — a trust. Those who govern remain accountable to Allah for how resources are raised, protected and spent, including whether people’s basic needs are met.
When substantial resources are absorbed by interest obligations while communities struggle for healthcare, education and security, Muslims must question the economic foundations producing those priorities.
A different economic foundation
Improved fiscal discipline, reduced waste and stronger public accountability are necessary. Yet stabilising debt within an interest-dependent system does not resolve the underlying Islamic objection to riba.
An Islamic alternative requires more than replacing financial terminology. It demands lawful financing grounded in genuine economic activity, appropriate ownership and contractual risk, alongside productive investment and responsible management of public resources.
Not every permissible Islamic contract involves profit-and-loss sharing. Equally, describing a product as “Islamic” or “asset-backed” does not, by itself, establish its compliance with Shariah. Its actual structure and obligations must withstand scrutiny.
Zakaah and awqaf can strengthen social provision within their respective Islamic rules, but they cannot excuse corruption or substitute for the governing authority’s responsibilities.
The civilisational question is therefore larger than how efficiently South Africa manages its debt. It concerns the authority and principles governing economic life: whether public finance remains organised around interest-bearing obligations or is reoriented towards lawful wealth creation, justice and the fulfilment of society’s needs.
For Muslims, the task is to understand how this dependence developed — and to advance credible alternatives rooted in Islam.
