Enoch Godongwana, Minister of Finance said in his medium-term budget speech, tax revenue is projected to increase to R2, 3 trillion by 2027/28.

Gross borrowing is expected to average around R557, 5 billion in the medium term.

Government is expected to raise USD 15 billion in 2024/2025 from the international community.

In 2024, GDP growth dipped to 1,1% from a projected 1,3% back in February 2024.

Government spending is projected to increase to R2, 77 trillion from R2, 4 trillion, by 2027/8.

He said Government’s Operation Vulindlela, has had its focus on reducing power cuts, improving logistics, lowering data costs, improving water supply and enabling the country to attract critical skills.

“Despite slower than expected revenue growth, the state is on track to achieve primary surpluses in 2024 /2025 and over the medium term. Debt is expected to stabilize at 75.5% of GDP next year” said Godongwana.

Response to the Mid-term budget

Guy Allan, SANLAM Portfolio Manager, pointed out to his followers on social media that the Rand was R17, 73 to the Dollar, he also said two-post pension receipts are expected to overshoot to R20 billion versus an estimated R5 billion.

The Minerals Council South Africa said it welcomes the “somewhat more optimistic real GDP growth forecasts” that informed the public finance ratios presented in the Medium-Term Budget Policy Statement (MTBPS).

“After a subdued 1.1%1 in 2024, this sees real GDP growth in South Africa averaging 1.8% between 2025 and 2027, somewhat higher than the IMF’s latest projection for average medium-term growth of 1.5% in South Africa.”

The Council also attributes the success of the MTBPS highlights, the slightly higher growth forecast  to the Government of National Unity (GNU), but cautioned that for sustainable public finances, growth needs to improve to well beyond 2%.

For this to materialize, the Council’s Allan Seccombe said in a statement, certain measures must kick in, including non-energy growth constraints and structural reforms.

“This has particular relevance for the mining sector. The MTBPS notes that the poor Transnet rail and port performance, regulatory bottlenecks, and crime are offsetting the mining sector’s gains from improved electricity supply. This explains why mining production remains below
the pre-COVID-19 level. These are the same issues that the Minerals Council have consistently highlighted as among the major constraints holding back the mining sector.”

Breadline Africa joined other civil society organizations requesting for more, direct funding towards comprehensive care beyond ECD centers.

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