Godongwana forecasts govt debt to reach R6 trillion
Finance Minister Enoch Godongwana says South Africa needs to better manage its debt so it can achieve its fiscal strategy goals.
Godongwana has told Parliament on Wednesday afternoon that government debt has risen too fast and is too high.
"We are anticipating that government debt will reach more than R6.05 trillion, or 75.5 per cent of GDP, in 2025/26. We know that our debt is unsustainable because debt-service costs have become the largest component of our spending and it is rising faster than economic growth. Debt-service costs will reach R388.9 billion in the current financial year."
Tabling the mini-budget, the minister said the cost to service the country's debt would exceed R380 billion in the current financial year.
READ: Godongwana: SA economy expected to grow by 1%
"Put differently, this means for every one Rand of revenue that government raises this year, 22 cents of this is paid in debt-service costs. To deal with this problem, we have taken difficult steps to reduce the budget deficit.
"We have restrained spending and maintained stable tax collection.
As a result of our measures, government achieved a primary budget surplus in 2023/24, for the first time in 15 years. As I said earlier, the surplus is needed for us to stabilise debt."
On revenue, Godongwana says government expects to collect R22.3 billion in the current financial year. It's lower than what was estimated in February.
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