The government faces a difficult balancing act between supporting growth, managing debt, and delivering essential services. Some of the proposed measures are positive, such as the investment in infrastructure and electric vehicles. However, the slow growth forecast and the high debt burden raise concerns about the sustainability of these efforts.
All South Africans should be engaged in the discussion about how to achieve long-term economic growth and prosperity. This requires addressing structural challenges such as education, skills development, and corruption. It also means finding innovative solutions to financing infrastructure and social programmes in a fiscally constrained environment.
The only potential concern was the “new” source of funds which will be to withdraw from foreign exchange “profits”. These are funds that have been created due to the depreciating rand over the years. Although this R150bn will reduce the total debt-to-GDP ratio (currently at 74%), this should only be seen as a short-term fix and generally only used in dire or emergency circumstances.
Overall, this was pretty much what was expected and there was not much the Minister of Finance could change.
The success of Budget 2024 will depend on the government's ability to effectively implement its plans and reforms. Any funding should be carefully managed both from ROI and to prevent mismanagement or corruption. The latter are some of the main reasons for the position South Africa finds itself in.
It also requires a commitment from all South Africans to work together to build a more booming future. This means much close collaboration between the public and private sectors.
