South Africa’s Budget Speech was postponed to a date in March 2025, due to opposition by the Democratic Alliance (DA), of a proposed VAT increase, but business, economists and financial advisors are vocal about what Minister of Finance, Enoch Godongwana, should tackle this year.
Denise van Huyssteen, Chief Executive Officer of the Nelson Mandela Bay Business Chamber, said
“the Budget will send a strong signal as to whether the Government of National Unity has been able to unify on spending priorities, focused on the effort needed to achieve the 3% GDP growth target in the economy by the end of this year. The Budget must facilitate an enabling environment for business, to support the drive for private sector investment that leads to sustainable job creation.”
van Huyssteen also said it is important that the government demonstrates fiscal discipline – spending within its means, and a path to debt reduction.
Albert Botha from Ashburton Investments said debt will be a focus in this year’s budget speech.
He said “How will the Minister balance the country’s borrowing needs with economic growth?
” The more debt you have, the less willing lenders are to give you more – unless they charge higher interest rates. This makes repayments costlier and reduces funds available for essential needs like infrastructure, Healthcare and education.”
Professor Theuns Pelser, Executive Director at TWIMS, said South Africa’s outlook is challenged by significant fiscal pressure.
” Government debt stands at R5, 9 trillion (75, 5% of GDP), with a R295 billion budget deficit reflecting excessive spending over revenue.
Debt servicing costs are R414, 7 billion, consuming resources that could fund growth – stimulating initiatives.”
About 32% of people who responded to a survey by Forvis Mazars SA, said they are interested in tax relief for business, 21% (energy and sustainability), another 32% (corporate tax and revenue) and the remaining 15% (global tax and trade policies). The survey was conducted via LinkedIn.