In the wake of the budget speech, many South Africans will be relieved there was no announcement of a significant increase in taxes. Others will welcome the stated intention to reduce the deficit and the debt-to-GDP ratio. But whatever comfort may be drawn from it should not blind us to the scale of SA’s fiscal and economic challenges.

Our economic indicators reveal an economy in profound crisis. While this has been exacerbated by the pandemic, it has deep roots. Over the past decade, SA has grown at about half the rate of other emerging markets. Investment has been falling in real terms. Government expenditure has been pushing upward, as has the tax burden on what is, in effect, a diminishing economy...

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