Finance Minister Enoch Godongwana delivers the 2024 Budget Speech. Picture: GCIS/GovernmentZA
Finance Minister Enoch Godongwana has allocated billions to stave off rising debt-service costs, increased social grants and provided more money for the Electoral Commission of South Africa (IEC) to conduct the May 29 elections.
Godonwgana, who was tabling his Budget on Wednesday, said debt service costs were crowding out other expenditure items in the budget.
He said the budget deficit would increase from 4% to 4.9% because of South Africa’s weak fiscal position.
Godongwana also announced they will invest more than R900 billion in infrastructure programmes.
In a bid to crack down on crime the government will hire 10,000 police officers this year.
This is in addition to the 20,000 officers who have been recruited in the last two years.
Godongwana said they wanted to reduce debt service costs after drawing down billions from the Gold and Foreign Contingency Reserve Account.
“A net reduction of R80.6 billion in non-interest expenditure is being implemented over the medium term. At the same time revenue has been revised up by R45.6bn over the medium term, relative to 2023 MTBPS. And, we have taken the decision to introduce a reform of the Gold and Foreign Exchange Contingency Reserve Account, also known as GFECRA.
“Taken together, even with the spending increases I will announce later, the national government gross borrowing requirement will decline from R457.7bn in 2024/25 to R428.5bn in 2026/27. The deficit will begin to improve from 2024/25 to an estimated 4.5% of GDP, reaching 3.3% by 2026/27,” said Godongwana.
After the announcement by President Cyril Ramaphosa that the elections will be held on May 29, Godongwana said they have allocated more funds to the IEC and political parties for their campaigns.
He said the IEC was allocated an additional R2.3bn.
The South African Police Service (SAPS) and South African National Defence Force have been given an additional R350 million to support the work of the IEC in the elections.
More than 350 parties are contesting the elections.
Godongwana said an additional R200m will be given to political parties to prepare for the elections.
The minister said they were fixing the rails and ports with the National Logistics Crisis Committee set up by Ramaphosa last year addressing some of the challenges.
He said third-party access to the rail network will be introduced in May this year.
On electricity, they will continue to support renewable energy projects.
The government will increase the old age grant by R100, the foster care grant by R50 and the child support grant by R20.
He said they were working with social development to improve the R350 Social Relief of Distress grant.
“These improvements will be within the current fiscal framework. For the extension of the grant beyond March 2025, the social security policy reforms, together with the funding source, will be finalised.”
Godongwana also said they will implement the National Health Insurance.
Ramaphosa has said he will sign the NHI Bill into law despite opposition from political parties and other sectors.
Godongwana said they will allocate funds for South Africa’s peacekeeping missions in different countries.
South Africa has deployed 2,900 soldiers in the Democratic Republic of Congo and 1,500 in Mozambique as part of the Southern African Development Community mission.
siyabonga.mkhwanazi@inl.co.za
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