We need to put our fiscal house in order: D-G Duncan Pieterse
Despite an underperforming economy and having this year's budget challenged twice from within the same cabinet in which he serves, finance minister Enoch Godongwana still has his real GDP growth projection on the upside for the medium-term.
In his budget overview, he estimates South Africa's real GDP growth to be 1.4% in 2025, 1.6% in 2026 and 1.8% in 2027. This despite the International Monetary Fund (IMF) recently slashing South Africa's GDP growth outlook to 1%.
It must be noted, as Godongwana told parliament in March, that the National Treasury's domestic GDP growth figures have consistently outperformed external estimations .
In the foreword to the latest budget overview, Treasury director-general Duncan Pieterse said the budget was being tabled in a difficult international environment, characterised by trade volatility and policy uncertainty.
'As global growth has faltered, South Africa's economic outlook has also weakened, with GDP expected to grow by only 1.4% in 2025. Global risk and economic weakness reinforce the need for us to put our fiscal house in order.'
Pieterse said South Africa's fiscal strategy remained on course so the government could 'spend less on debt-service costs and more on critical public services'. The government still planned to stabilise debt in 2025/26 at 77.4% of GDP and Pieterse said signs of progress were already emerging.
'For the first time since the 2000s, government is consistently running a primary surplus, where revenue exceeds non-interest expenditure. In time, this growing surplus will reduce rising debt-service costs.
'These costs will consume 22c of every rand collected in revenue in 2025/26 — money that could be better spent to build fiscal shock absorbers and fund health, education and security. Structural reforms are laying the foundation for future prosperity.'
He said transformative changes would make it easier for the state and private sector to invest in the critical infrastructure needed to build the economy and create much-needed jobs.
'Yet success hinges largely on a willingness to act on all roadblocks that stifle investment. This budget projects consolidated spending growth averaging 5.4% annually, from R2.4- trillion in 2024/25 to R2.81-trillion in 2027/28.'
The director-general said revisions to the March 2025 budget review projections reduce anticipated revenue and spending, but departments largely retain their baselines and critical service delivery areas are protected.
'Major reforms to state spending and the budget process are also under consideration. Public spending is inefficient. Previous spending reviews have identified tens of billions of rand in potential savings from poorly performing programmes that can be redirected in future budgets.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
2 days ago
- IOL News
Stella Ndabeni unveils R2. 9 billion budget to empower small businesses
Small Business Development Minister Stella Ndabeni has outlined several financing package schemes to fund Micro, Small, and Medium Enterprises in the 2025/26 financial year Image: Simphiwe Mbokazi / Independent Newspapers Small Business Development Minister Stella Ndabeni on Friday tabled in the National Assembly her department's R2.9 billion budget for the 2025/26 financial year. Speaking during the budget vote debate, Ndabeni said the budget reflected their unwavering commitment to the spirit of the Freedom Charter. 'We are building a more inclusive economy that enables youth, women, and communities in townships and rural areas to participate meaningfully in shaping South Africa's future through Micro, Small, and Medium Enterprise (MSME) development,' she said. Ndabeni also said R2.4 billion of the budget will be transfers and subsidies to the department's entities, while the remaining R468 million was meant for compensation of employees at R265 million, R197 million for goods and services, and R6 million in capital expenditure. 'Of the R2.45 billion for transfers and subsidies, the Small Enterprise Development and Finance Agency (SEDFA) receives R1.908 billion (77.9% of the transfers and subsidies). The department manages the remaining R542.6 million, accounting for 22.1% of the total transfers.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The minister said the department has allocated just R990m in entrepreneurship finance packages to the Development Fund, which is meant for new entrants and higher risk borrowers, and R330m to the Commercial Fund for the growth-ready MSMEs. 'We will launch a new Youth Entrepreneurship Fund, initially capitalised at R300m. This fund is aimed at harnessing the creativity and innovation of our younger generation to contribute to the country's growth through entrepreneurial ventures,' she said. 'We will launch the new Women Entrepreneurship Fund, also initially capitalised at R300 million, to enable more women to be self-employed as entrepreneurs and small business owners.' Ndabeni added that R979m in credit guarantees will be allocated for small enterprise borrowers. 'These credit guarantees remain an important part of our offerings, leveraging banks and non-bank financial institutions to take on MSME borrowers that are above their ordinary risk tolerance.' On township and rural economy development, Ndabeni said they will build 50 small business hubs for entrepreneurs and MSMEs in each district. 'Aligned to local industrialisation opportunities, these will be spread across the townships and rural areas, and will integrate the financial and non-financial services we offer as a portfolio. 'We will also refurbish small industrial parks in four provinces - North West, Mpumalanga, Eastern Cape and Northern Cape,' she said. Ndabeni also said digital transformation of small businesses will be at the centre, as township and rural enterprises often struggle to get access to reliable and affordable broadband services. 'Through SEDFA and as part of our mandate to finance small businesses, we will support 50 internet service providers across 50 districts to provide the necessary affordable, quality broadband to small enterprises and communities in rural areas. 'This intervention will not only deliver affordable broadband to small enterprises and communities, but will bring ownership of telecommunications infrastructure to people who have never owned such infrastructure before and create jobs for the youth.' The department will also support two cellphone repair centres in 50 districts. 'We have budgeted R958.7 million over the Medium-Term Expenditure Framework (MTEF), and R310.8 million for 2025/26. SEDFA will also contribute R253 million over the MTEF.' According to Ndabeni, a total of R543m has been allocated for the Township and Rural Entrepreneurship Programme to empower local businesses in order to drive economic growth and job creation in historically disadvantaged areas.
TimesLIVE
2 days ago
- TimesLIVE
Senegal's revised budget sees slightly wider fiscal deficit
Senegal has revised its 2025 budget deficit upward to 7.82% of gross domestic product (GDP) from an initial forecast of 7.08%, according to the draft revised finance bill seen by Reuters on Thursday. The increase is attributed to a drop in projected revenues and a downward revision of nominal GDP, the draft bill said. It cited global economic headwinds and domestic fiscal adjustments as key factors behind the revision. "This development is mainly explained by a decline in budget revenues combined with a downward revision of the nominal GDP," the bill said. Economic growth in the West African nation, which recently started producing oil and gas, is now expected at 8.0% compared with the previous forecast of 8.8% in 2025. An audit in September revealed that Senegal's budget deficit exceeded 10% from 2019 to 2023, more than twice the figures reported by the previous administration. The International Monetary Fund suspended disbursements under its programme with Senegal last year after the country acknowledged misreporting debt and deficit figures, saying discussions on a new arrangement would not proceed until the issue was resolved.
The Citizen
2 days ago
- The Citizen
Sars deducts billions from RAF for ‘Eskom payments' despite court interdict
Claims it had no choice otherwise National Treasury's records 'would not be accurate'. There is no official comment about Finance Minister Enoch Godongwana reportedly having been due to provide 'a certain affidavit' to the court since April. Picture: Moneyweb The South African Revenue Service (Sars) has, despite being interdicted from doing so, deducted R5.07 billion of the R5.1 billion it planned to deduct from the fuel levy payments it makes to the Road Accident Fund (RAF) – the R5.1 billion being the 'diesel refunds' amount Sars has agreed to pay Eskom. This was confirmed on Wednesday by RAF head of communications McIntosh Polela in response to questions emailed to the fund on 13 June. Moneyweb reported on 17 June that the RAF had applied for a contempt of court order against Sars because of its alleged failure to adhere to an interim interdict obtained by the fund in the High Court in Pretoria on 26 March 2025. The interim interdict prohibits Sars from deducting R5.1 billion – or any part of this amount – from the RAF fuel levies it collects and pays to the fund. Moneyweb requested comment from Sars, also on 17 June, about the alleged continuation of these deductions following the issuing of the interim interdict but has not yet received a response. ALSO READ: RAF castigated in high court case, but gets further Sars 'relief' in another Deductions continued Polela said Sars made its most recent deduction on Monday this week, and up to that date (23 June) has deducted a total of R5 072 360 844.85. He said deductions made by Sars to the monthly fuel levy payments it makes to the RAF were made this year on: 20 February (before the interim interdict prohibiting the deductions was issued) 28 March 22 April 27 May 23 June. Sars's alleged non-adherence to the interim interdict emerged in a parliamentary portfolio committee on transport meeting with the RAF on 11 June. Suspended RAF CEO Collins Letsoalo appealed to the portfolio committee to help the RAF with the issue of non-payment by Sars. 'Sars has acted recalcitrant,' said Letsoalo at the time. 'In fact, we have opened a case of contempt of court against them.' He added that, since April, Minister of Finance Enoch Godongwana is supposed to have submitted 'a certain affidavit' to court on an urgent basis, but he has not done this and 'so they [Sars] keep on deducting the money'. 'Sars is unlawfully deducting our money. I hope this portfolio committee will write to them and ask them because clearly the ministry has not helped us,' he said. Questioned by portfolio committee chair Selelo Selamolela about the issue, Letsoalo said the RAF won its case against Sars, but the tax authority ignored the court order and still deducted the money. He indicated that by then – 11 June 2025 – he was sure Sars had probably deducted R5 billion of the money. ALSO READ: Scopa launches inquiry into RAF misconduct claims What does Treasury say? Moneyweb requested comment from National Treasury on 13 June about Godongwana's alleged failure to submit an affidavit to court related to the RAF's contempt of court application against Sars. Moneyweb also asked National Treasury if it could confirm that Sars continued to deduct amounts from the monthly fuel levy payments it makes to the RAF after the high court interdict was issued – and, if so, for comment about these deductions while an interdict prohibiting these deductions is in place. It responded last week, stating: 'The matter is before the court therefore, the National Treasury cannot comment until a ruling has been made.' ALSO READ: RAF CEO placed on special leave with full pay, as MPs grill fund Original dispute was with Eskom The dispute between the RAF and Sars relates to 'diesel refunds' claimed by Eskom in terms of the Customs and Excise Act. A dispute between Sars and Eskom arose when Sars decided that Eskom was not entitled to the diesel refunds for a period of about 30 months between 2019 to 2021. However, Sars and Eskom then entered into a settlement agreement on 17 October 2024 in terms of which Sars claimed it was obliged to pay Eskom an amount of about R5.1 billion. But Sars only informed the RAF of this agreement on 12 November 2024 – and that it would recoup the R5.1 billion from the RAF levies over a two-month period, which was subsequently extended to five months. Despite the RAF declaring a dispute with Sars in December 2024 in terms of the Inter-Governmental Relations Framework (IRF) Act and the ongoing dispute resolution process in terms of this act, Sars deducted the first tranche of about R1.2 billion from the RAF monthly levy payments. The fund only became aware of this deduction on 26 February 2025. Sars claimed it had no choice but to proceed in deducting/recouping the money because, if it did not, National Treasury's records would not be accurate. This resulted in the RAF lodging its urgent high court application. In a judgment handed down on 26 March 2025, Judge Ronel Tolmay said she was informed by counsel representing Sars that the certificate to National Treasury regarding the second tranche payment would be issued the same day she was hearing the matter. Tolmay interdicted and prohibited Sars from making the deductions, declaring the order operative for a maximum of 45 days from the date of the judgment, or until the dispute in terms of the IRF Act has been resolved. It is unclear when the RAF's contempt of court application against Sars will be heard. This article was republished from Moneyweb. Read the original here.
