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.

9 highlights from Gigaba’s speech:

  1. SA’s national debt will rise to R3.4-trillion or 60 percent of GDP by 2020
  2. Government is facing a budget deficit of R50.8-billion next year‚ projected to rise to R89.4-billion by 2020
  3. The economy is expected to grow by only 1.2 percent next year, peaking at a modest 1.9 percent in 2020
  4. Government expenditure is expected to rise to R1.9-trillion in 2020‚ leaving a deficit of just over R225-billion
  5. Government will in the next three years be forced to borrow more money to fund its spending plans
  6. In the next three years government will be spending more money on paying its debts than on education‚ social development and health services
  7. 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
  8. Salaries of public servants were expected to rise from R580-billion in 2018 to R677-billion by 2020
  9. South African Airways and the Post Office will receive R8.5-billion more in government funding.

Article written by

Nidha Narrandes

Nidha Narrandes is a food-obsessed travel addict with 21 years of journalism experience. Her motto - Travel. Eat. Repeat. She is happiest on a road to nowhere without a plan. A masterchef at home, she can't do without chilli - because chilli makes the world a tastier place.