{"id":817127,"date":"2025-03-17T08:06:16","date_gmt":"2025-03-17T06:06:16","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=817127"},"modified":"2025-03-17T08:06:21","modified_gmt":"2025-03-17T06:06:21","slug":"south-africa-has-no-more-money","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/817127\/south-africa-has-no-more-money\/","title":{"rendered":"South Africa has no more money"},"content":{"rendered":"\n

Ann Bernstein, the executive director of the Centre for Development and Enterprise (CDE), warned that South Africa has run out of money.<\/p>\n\n\n\n

The CDE is an independent policy research and advocacy organisation and South Africa\u2019s leading development think tank.<\/p>\n\n\n\n

Bernstein is a highly regarded commentator who worked with the Development Bank of Southern Africa, the World Economic Forum, and the Brenthurst Foundation.<\/p>\n\n\n\n

She told delegates at the 2025 Biznews Conference that the 2025 Budget abandoned last year\u2019s promise to cut spending to address the deficit.<\/p>\n\n\n\n

Instead, Finance Minister Enoch Godongwana increased taxes through a value-added tax (VAT) increase and personal income tax bracket creep.<\/p>\n\n\n\n

She said the government offered civil servants, who are already overpaid, a higher-than-inflation increase, which put tremendous pressure on the country\u2019s finances.<\/p>\n\n\n\n

Another thing that drains South Africa\u2019s budget is the localisation and black economic empowerment (BEE) laws.<\/p>\n\n\n\n

Hundreds of billions are lost due to the costs related to BEE, which compels the government to pay more than market value for goods and services.<\/p>\n\n\n\n

\u201cWe estimate that the country can save over R50 billion in three years by doing away with these requirements,\u201d Bernstein said.<\/p>\n\n\n\n

Another area where the government could save money is by eliminating sector education and training authorities (SETAs).<\/p>\n\n\n\n

\u201cNobody likes the SETAs. They are not performing. They are corrupt, and they are useless. You can save R80 billion by stopping their funding,\u201d she said.<\/p>\n\n\n\n

She said the government needs to take spending cuts seriously and set clear targets for where spending will be cut.<\/p>\n\n\n\n

She warned that if South Africa continues with its current policies, it will drive the country into a bigger crisis.<\/p>\n\n\n\n

\u201cWe are living beyond our means. We need to be like the Argentinian President Javier Milei who campaigned under the slogan, \u2018We have no more money\u2019,\u201d she said.<\/p>\n\n\n\n

South Africa is out of money<\/h2>\n\n\n\n
\"\"<\/a>
Efficient Group chief economist Dawie Roodt<\/figcaption><\/figure>\n\n\n\n

Bernstein is not the only economic expert who warned that South Africa is out of money and is heading towards a financial disaster.<\/p>\n\n\n\n

Last year, Efficient Group chief economist Dawie Roodt said South Africa has run out of money as the state\u2019s fiscal debt rapidly rises while the economy stagnates.<\/p>\n\n\n\n

\u201cThere\u2019s no doubt that the money is finished, and it is certainly worse today than it was a year ago,\u201d he said in June 2024.<\/p>\n\n\n\n

Roodt explained that this can be seen by looking at South Africa\u2019s fiscal debt, which keeps increasing from one year to the next.<\/p>\n\n\n\n

Godongwana said in his 2025 budget speech that government debt is expected to reach 76.2% of South Africa\u2019s gross domestic product (GDP) in this financial year.<\/p>\n\n\n\n

Over the last financial year, debt-service costs amounted to R389.6 billion. This translates to 22 cents of every rand the country raises in revenue.<\/p>\n\n\n\n

Debt-servicing costs will increase to R424.9 billion in the next financial year. This 9% increase in South Africa\u2019s interest payments is one of the fastest-growing items in the 2025 Budget.<\/p>\n\n\n\n

However, it gets worse. Roodt highlighted that the government also has implicit and explicit debt obligations linked to state-owned enterprises.<\/p>\n\n\n\n

\u201cThere are implicit and explicit that finance minister Enoch Godongwana must include in his outstanding debt estimates. He does not do that,\u201d Roodt said.<\/p>\n\n\n\n

South Africa has R770 billion in guarantees to state-owned enterprises, which are not included in the debt levels Godongwana shared.<\/p>\n\n\n\n

Godongwana admitted that taking on additional debt to meet the spending pressures was also not feasible.<\/p>\n\n\n\n

\u201cThe amount is simply too large. The cost of borrowing would be unaffordable,\u201d the minister said in his budget speech.<\/p>\n\n\n\n

\u201cOur sub-investment credit rating would also make this level of borrowing costlier and put us at risk of even further downgrades.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The Centre for Development and Enterprise\u2019s executive director, Ann Bernstein, warned that South Africa has run out of money.<\/p>\n","protected":false},"author":10,"featured_media":817129,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[20715,22038,1459,21799],"class_list":["post-817127","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-ann-bernstein","tag-centre-for-development-and-enterprise-cde","tag-dawie-roodt","tag-finance-minister-enoch-godongwana"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817127","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=817127"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817127\/revisions"}],"predecessor-version":[{"id":817128,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817127\/revisions\/817128"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/817129"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=817127"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=817127"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=817127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}