SA’s debt servicing costs will reach R389.6bn in the current financial year. This according to finance minster Enoch Godongwana, translates to 22 cents of every rand raised in revenue.
Godongwana announced this during his tabling of the 2024/25 national budget in parliament on Wednesday. The cost has marginally increased from last year which stood at R388.9bn.
Godongwana said the cost of servicing debt is more than what the country spends on health, the police and basic education.
“We must reverse this trend and prevent the cost of debt from taking away resources that could otherwise be spent on our pressing social needs, or to invest in growth,” he said.
He said government debt will stabilise, at 76.2% of GDP in 2025/26, while the consolidated budget deficit also narrows, to 3.5% by 2027/28.
Godongwana said as debt stabilises, a growing primary surplus will enable the government to reduce debt-service costs as a proportion of revenue.
“Some of those savings will be used to build up fiscal buffers that we need as protection against future economic shocks,” he added.
SowetanLIVE
Debt to cost SA R389bn to service – finance minister
'Amount more what what the country spends on health, the police and basic education'
Image: Shelley Christians
SA’s debt servicing costs will reach R389.6bn in the current financial year. This according to finance minster Enoch Godongwana, translates to 22 cents of every rand raised in revenue.
Godongwana announced this during his tabling of the 2024/25 national budget in parliament on Wednesday. The cost has marginally increased from last year which stood at R388.9bn.
Godongwana said the cost of servicing debt is more than what the country spends on health, the police and basic education.
“We must reverse this trend and prevent the cost of debt from taking away resources that could otherwise be spent on our pressing social needs, or to invest in growth,” he said.
He said government debt will stabilise, at 76.2% of GDP in 2025/26, while the consolidated budget deficit also narrows, to 3.5% by 2027/28.
Godongwana said as debt stabilises, a growing primary surplus will enable the government to reduce debt-service costs as a proportion of revenue.
“Some of those savings will be used to build up fiscal buffers that we need as protection against future economic shocks,” he added.
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