R94bn: South Africa’s looming budget shortfall
For the past few years the country has enjoyed huge revenue overruns thanks to the commodity boom. As it recedes, it’s exposing a gaping hole in the public finances — with health and education expected to bear the brunt
South Africa’s public finances are under pressure, with recent data suggesting the country is heading for a much larger than expected budget deficit this year as tax revenue declines while expenditure rises. To prevent a debt blowout, the provinces are being exhorted to cut costs by R25bn, despite the damage this could do to already hollowed-out health and education services.
In the past two budgets, the National Treasury topped up provincial budgets towards the end of the fiscal year by tens of billions of rand, partly to cover wage pressure. This was possible thanks to large revenue overruns, almost entirely as a result of the commodities boom. ..
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