Johnathan Paoli
Minister of Finance Enoch Godongwana has warned that unless spending cuts were introduced, the government ran the risk of running out of money by March next year.
Godongwana said debt servicing costs alone were averaging a massive R366 billion per year.
While he argued that his department’s cuts were below last year’s underspending of R28 million, and due to the country’s capacity problems, the government needed to increase its borrowing to prevent drastic reductions in expenditure.
“First thing we’ve done is to manage this thing in a more prudent way, do a combination of cutting expenditure, and bumping up borrowing,” Godongwana said.
However, Godongwane warned of the current state of government borrowing, saying that imminent debt repayments could deplete the fiscus by the end of this financial year.
This comes as Godongwana is expected to deliver on Wednesday the Medium-Term Budget Policy Statement (MTBPS) in Parliament which will
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