Finance minister Tito Mboweni painted a bleak picture of SA’s ballooning debt as he announced a massive cash injection into embattled state-owned entity (SOE) Eskom. The debt to GDP ratio, which compares the country’s sovereign debt to its economic output for any given year, has increased 0.2 of a percentage point from the medium-term budget policy statement in October. The budget deficit is projected to narrow from 4.2% of GDP in 2018-2019 to 4% in 2021-2022. Gross debt is expected to stabilise at 60.2% of GDP in 2023-2024. This is a huge jump from 27.8% in 2008, before the global financial crisis. “Weak economic performance and residual problems in tax administration have resulted in large revenue shortfalls. The deteriorating financial position of state-owned companies has put additional pressure on the public finances,” the Treasury said.

In response, the Treasury has proposed a reprioritisation of expenditure and tax measures to contain the budget deficit and stabilise de...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now