The biggest winners and losers in the 2023 budget

 ·23 Feb 2023

South African Finance Minister Enoch Godongwana’s budget benefited from rising precious mineral prices and increased tax collection.

But these positive tailwinds aren’t expected to continue as the country battles frequent power outages, deteriorating rail and port infrastructure and unpredictable fuel prices.

To shore up the economy, Godongwana is giving consumers and companies tax relief to encourage them to generate renewable energy, which should ease the load on embattled state-owned power provider Eskom.

At the same time, he’s discouraging the use of dirty energy with increased carbon taxes and appears intent on reining in the state’s runaway wage bill.

Here’s a list of the winners and losers in Wednesday’s national budget announcement:


Eskom and its Investors

The government has finally provided clarity on its plans to assist Eskom, which should assure bond holders they will be paid in full.

The utility will get R254 billion in debt relief over the next three years, support that will alleviate its persistently weak financial position and free up funds for maintenance, which in turn could lead to fewer and less severe power outages.

Other Embattled State Companies

The Land Bank, which has been in default for almost three years, has secured a R5 billion support package, while South African Airways will get R1 billion and the South African Post Office R2.4 billion.

Consumers Who Can Afford Solar Installations

Godongwana penciled in R4 billion of tax relief for households that install new solar panels. Rebates equivalent to 25% of the cost of the panels installed at a private residence are on offer.

The concession can be used to offset an individual’s personal income tax liability up to a maximum of R15,000.

Companies investing in green energy have been allocated R5 billion in an expanded drive to encourage generation. Businesses will be able to claim a 125% deduction in the first year for all renewable energy projects brought into use between March 1 and the end of February 2025.

Welfare Grant Recipients

Old-age pensions and other welfare payments will be increased by 5%, in line with the inflation rate.

The National Treasury, together with other departments, is reviewing options to provide protection for the working-age population that could replace or complement the Covid-19 grant.

Any permanent increase in expenditure, such as a new welfare grant, would need to be matched by permanent revenue increases or spending reductions elsewhere.

Food Manufacturers

To combat food price inflation, which rose to an almost 14-year high in January, food manufacturers will be eligible to receive refunds of levies imposed on diesel for a period of two years, starting on April 1.


Most South Africans

Godongwana revised downward expectations for economic growth, household consumption, exports and imports. He also warned that the state’s debt-servicing costs will rise and power shortages are likely to persist for some time to come.

Although employment growth in the first three quarters of last year expanded 4.6% compared with the previous period, the number of people with jobs now is on par with levels recorded in the first half of 2016 and the pace of job creation is expected to slow in 2023.

South Africa’s unemployment rate of 32.9% is the third-highest in a group of 82 nations and the euro zone, as tracked by Bloomberg.

Public Sector Workers

The budget provides for the state’s wage bill to increase by an average of 3.3% annually over the next three fiscal years. That’s below the National Treasury’s 5% average consumer price inflation forecast.

Drinkers & Smokers

As ever, consumers and manufacturers of alcohol and nicotine-based products will be taxed more heavily. A can of beer will cost 10 cents more, while a pack of 20 cigarettes will rise 98 cents.
Carbon Emitters

Carbon fuel levies will increase by 1 cent to 10 cents a liter for gasoline and to 11 cents a liter for diesel from April 5.

Oil & Gas Companies

To ensure South Africa is adequately compensated for the loss of its finite resources, Godongwana plans that minimum royalty rates on extracted fuels will be increased to 2% from 0.5%, with the maximum remaining at 5%.

Read: South Africa’s 2023 budget in a nutshell

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