Godongwana optimistic amid spending cuts, crippling debt and poor economic growth in his MTBPS

Phuti Mosomane

In his Medium-Term Budget Policy Statement (MTBPS), Finance Minister Enoch Godongwana was at pains to say all is not doom and gloom even as he conceded that the country would need a staggering R500 billion a year to cover its debt servicing costs.

With a shortfall in revenue from corporate taxes especially taxes from mining, a decline in commodity prices, a high public wage bill, Godongwana tried against all odds to protect the most vulnerable by extending the R350 Covid-19 social relief grant by another year until March 2025.

Government spending has exceeded revenue since the 2008 global financial crisis, Godongwana told Parliament. These rising annual budget deficits have reached an extent where the government will have to borrow an average of R553 billion per year over the medium term, he said.

“As a result, gross debt rises from R4.8 trillion in 2023/24 to R5.2 trillion in the