(4 minutes read)
South African finance minister Tito Mboweni presented the mid-term budget yesterday. www.trendsnafrica.com captures the highlights of the much talked about Budget delivered hours before for the readers across the world. The Budget was eagerly watched both domestically and globally since it was coming in the midst of Covid-19 pandemic and when the economy is expected to confront a severe contraction abetted by the continuing recessionary trend.
Budget Highlights
The economy is expected to contract by 7.8% this year and the 2021 outlook is more uncertain leaving no room for businesses to look forward to an optimistic trajectory in the near future
The ratio of debt-to-GDP at around 95% within the next five years.
The stock of gross debt will vault from roughly R4 trillion to R5.5 trillion in 2023-24.
The medium-term fiscal strategy narrows the main budget primary deficit from an expected R266 billion in 2021/2022 to R84 billion in 2023-24 to achieve a surplus by 2025-26
Government is borrowing at a rate of R2.1 billion per day
A consolidated spending of R6.2 trillion over the 2021 Medium Term Expenditure Framework, of which R1.2 trillion goes to learning and culture, R978 billion to social development and R724 billion to health”.
The South African economy to grow by 3.3% in 2021, 1.7% in 2022 and 1.5% in 2023.
The procurement of almost 12 000 MW of new electricity capacity to be provided by independent power producers (IPPs).
Subsidies of R2.2 billion will support the Social Housing Program aimed at poor, working South Africans. A further 6.7 billion has been contractually committed to this programme and total investment for the program will be R20 billion over the next 10 years; and
Cash grants were paid to over R22 million people, nearly half of the population;
Extension of the social relief of distress grant to the end of January 2021 and will direct R6.8 billion from the public employment programme allocation;
Temporary increases in other grants will come to an end
R1 billion was also allocated for food relief to fight hunger.
R12.6 billion has been allocated to the employment initiatives
Government is borrowing at a rate of R2.1 billion per day
