Economists have been left scratching their heads in the aftermath of South Africa’s 2024 budget. The National Treasury’s controversial move to tap valuation gains on foreign exchange reserves to create more fiscal space seems not to have initially paid off the way many hoped it would.

This is despite the fact that drawing R150bn from the Gold & Foreign Exchange Contingency Reserve Account (GFECRA) will reduce the general borrowing requirement and slow the accumulation of government debt, allowing for considerable savings on debt service costs...

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