from SAVIOUS KWINIKA in Cape Town, South Africa
CAPE TOWN, (CAJ News) – SOUTH Africa will be spending more money than it will generate in the coming year.
Presenting his Budget Speech in Cape Town on Wednesday afternoon, Finance Minister Tito Mboweni, disclosed Africa’s most advanced economy expects revenues of R1,58 trillion and spending of R1,83 trillion.
“That means we will spend R243 billion more than we earn,” Mboweni said.
“Put another way, we are borrowing about R1,2 billion a day, assuming that we don’t borrow money on the weekend.”
Mboweni said in this coming year, interest expenditures would be R209,4 billion.
The expenditure and tax adjustments are designed to largely counteract the additional allocation for Eskom and the revenue shortfall.
As a result, gross national debt will still stabilise at about 60 percent of gross domestic product (GDP) in 2023/24, in line with Mboweni’s October forecast.
A bailout of power utility Eskom was among the highlights of the budget.
Mboweni disclosed the government was setting aside R23 billion a year to financially support Eskom during its “reconfiguration.”
“I want to make it clear: the national government is not taking on Eskom’s debt. Eskom took on the debt. It must ultimately repay it,” Mboweni said.
The opposition Democratic Alliance (DA) denounced the budget as “a budget speech of bailouts not for the people of South Africa.”
“Mboweni’s maiden speech reveals a major increase in the gap between revenue and expenditure that has been caused primarily by the Eskom financial crisis,” said Alf Lees, DA Shadow Minister of Finance.
– CAJ News