Budget 2024: SA can only borrow more, raise taxes or cut expenditure - Economists

JOHANNESBURG - Finance Minister Enoch Godongwana will have the tough job of plugging the widening fiscal deficit as National Treasury scrambles to get its finances in order.

Surging expenditure and high debt have also left the country’s balance sheet in a dire state – putting the country’s fiscal credibility in jeopardy.

These are all expected to take centre stage when Godongwana tables the annual budget speech in Cape Town on Wednesday.

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Godongwana will have to put rands and cents to priorities made by President Cyril Ramaphosa in the State of the Nation Address.

But this year’s budget speech comes on the back of continued pressure on the fiscus.

The strain on the public purse is mainly driven by lower-than-expected revenue collection, poor economic growth made worse by the energy and logistics crisis and high debt servicing costs.

Some economists believe this will leave Godongwana with three options to pick from to raise funds to cover the fiscal shortfall – borrow more, raise taxes or cut expenditure.

Godongwana is also expected to be at a crossroads when he puts on his political hat with the upcoming general elections expected to weigh on fiscal decisions, especially where social wages are concerned.