2024 budget review

No adjustments to tax table. Secretly increases revenue due to inflation

No changes to retirement fund ump sum withdrawal

No adjustment to medical tax credit. May be in anticipation to the NHI that wants to be
released. Rumors about scrapping this credit.

No changes to transfer duties

No changes to taxes for companies.

Luckyily vat was nnot increased.

Overall the budget was quite conservative may be due to 2024 being the election year.

Revenue is planned to be 15bil more than last year.

382bil current debt service cost

Projected GDP
0.6% seen in 2023 (forecast 2024 onwards 1.3% 1.6% 1.8%)
This is a very low growth rate for a developing country some developed countries have
higher growth rates whilst not even needing this. These growth rates will be insufficient to
deal with unemployment and poverty.
Investment growth
4.2% in 2023 (forecast 3.7% 4% 3.6%)
Challenging business conditions high borrowing costs and low investor confidence

Gov debt/GDP ratio

This causes higher borrowing costs.
Weaker growth and revenue performance as a large amount of money is allocated to
interest payments.
Weaker exchange rate which could pose risks to the domestic and foreign debt portfolios.
I.e. More and more money is allocated to debt even tough debts aren’t growing.
The borrowed funds are also inefficiently used by state owned companies, like Eskom.

Debts aren’t necessarily bad if the borrower generates a profit/more money than the debt
through its business.

Allocation of GFECRA funds in the MTEF

GEFRA funds help insulate the central banks profit and loss statement from currency swings
as valuation losses are charged to the national bank.

SARB independent from SA government.

Impact of being greylisted and a poor credit rating

Foreign investments are negatively impacted by this as less money flows into SA due to
lower Investor confidence as investors feel that the risk/reward ratios aren’t good enough.

We were greylisted in feb 2023 due to FATF felt that SA had deficiencies in our technical
compliance and effectiveness of the country’s system to combat money laundering and the
financing of terrorism. (the illicit movement of money in the SA money system is too easy)

Institutions important for SA economic growth and regulation.

SARS-
Higher education
Secure property rights
Health care
Financial institutions
Freedom of press/speech
National police
Rule of law
Separation of power

Thee institutions are important to create and maintain a stable and safe regulated space for
economic activity