Finance Minister Malusi Gigaba revealed some harsh truths to South Africans on Wednesday when he presented his Medium-Term Budget Policy Statement in Parliament. The country’s national debt is spiraling out of control, expected to reach R3.4-trillion in three years time. Moments after Gigaba spoke the rand dropped to a 10-month low. Gigaba added that the country faced a budget deficit of R50.8-billion next year‚ projected to rise to R89.4-billion by 2020. While he criticised the management of state owned enterprises he also announced that South African Airways and the Post Office would receive an additional R8,5-billion to address their financial woes.
— IG: @MbuyiseniNdlozi (@MbuyiseniNdlozi) October 25, 2017
9 highlights from Gigaba’s speech:
- SA’s national debt will rise to R3.4-trillion or 60 percent of GDP by 2020
- Government is facing a budget deficit of R50.8-billion next year‚ projected to rise to R89.4-billion by 2020
- The economy is expected to grow by only 1.2 percent next year, peaking at a modest 1.9 percent in 2020
- Government expenditure is expected to rise to R1.9-trillion in 2020‚ leaving a deficit of just over R225-billion
- Government will in the next three years be forced to borrow more money to fund its spending plans
- In the next three years government will be spending more money on paying its debts than on education‚ social development and health services
- The education budget is expected to rise to R400-billion a year by 2020‚ social development by R286-billion and health by R235-billion in the same period
- Salaries of public servants were expected to rise from R580-billion in 2018 to R677-billion by 2020
- South African Airways and the Post Office will receive R8.5-billion more in government funding.
Dear South African Students
THIS IS FAILURE: Deficit: 4.3% from 3.1% target Spending: R3.9bn higher than anticipated Revenue shortfall: R50.8bn Growth: 0.7%#MTBPS2017
— Justice Malala (@justicemalala) October 25, 2017