Budget Day 2022: How much has govt allocated to job creation in past speeches?

JOHANNESBURG - As the country’s accelerating debt servicing costs continue to be the source of apprehension and anxiety among many sections of society, Finance Minister Enoch Godongwana is expected to announce measures to stabilise the debt to GDP ratio when he presents the budget on Wednesday afternoon.

The 2021 budget review indicated that government was spending over R269 billion on debt service costs while public debt is expected to stabilise at 88.9% of GDP by the 2025/2026 financial year.

When Godongwana steps into the parliamentary precinct on Wednesday afternoon to deliver his maiden speech, he will be welcomed by scenes of protests from different interest groups in the country.

Among them will be the red berets, as members of the Economic Freedom Fighters (EFF) are known, who plan to protest against the country’s continued reliance on loans from international bodies such as the World Bank, which recently lent South Africa R11 billion.

And they are not the only ones concerned.

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Economists said that debt stabilisation was one of the factors which made the country’s financial state fragile in the long term despite the pockets of good news expected from the Budget Speech.

Chief economist at Alexander Forbes, Isaah Mhlanga said: “Let’s try to push back from unexpected expenditure that we can avoid and be surprised, it’s always good to get a good surprise than getting bad surprises that forces us to take these loans.”

Spending items such as the social relief of distress grant, which many economists say will likely remain beyond the recent year’s extension, could however see government continue to raise spending with concerns that this would thwart plans to avoid a debt crisis.