THE government should borrow from the domestic market as much as possible for its spending requirements instead of relying on foreign inflows, Finance Minister Pravin Gordhan said.

THE government should borrow from the domestic market as much as possible for its spending requirements instead of relying on foreign inflows, Finance Minister Pravin Gordhan said.

Addressing the National Council of Provinces in Parliament yesterday, Gordhan said the government would have to borrow more to make up for the revenue shortfall and also prune unnecessary spending.

The government and state-owned enterprises plan to spend R787billion during the next three years to improve infrastructure.

Gordhan said: "Our borrowing requirements must be met in a manner that will not hinder our future growth plans.

"Our approach to addressing our borrowing requirements should be to ensure that as much of our borrowing requirements as possible can be met domestically instead of relying on foreign inflows."

Gordhan said the government debt would increase as revenue falls in the face of South Africa's first recession in 17 years, pushing the budget deficit higher than estimated in February.

He said: "We have to prune unnecessary spending and re-prioritise our plans."

Earlier this month Gordhan said the government was about R19billion below its benchmark target for revenue in the first quarter of this fiscal year. - Sowetan