Finance Minister Enoch Godongwana says the country’s debt is now expected to peak and stabilise at 76% of Gross Domestic Product, up from a previous forecast of 75% of GDP in the 2025/26 financial year.
Godongwana was delivering the Budget Speech in Cape Town.
Spending on interest payments on debt is expected to reach nearly R390 billion which is higher than spending on health, basic education and economic development programmes.
Godongwana says government notes that debt-servicing costs make it difficult to spend on more items that would benefit the country.
“Debt-service costs will amount to R389.6 billion in the current financial year. This translates to 22 cents of every rand we raise in revenue. It is more than what we spend on health, the police and basic education. We must reverse this trend and prevent the cost of debt from taking away resources that could otherwise be spent on our pressing social needs, or to invest in growth.”
VIDEO| Minister Enoch Godongwana says debt makes it difficult to spend on other priorities:
Godongwana on debt service costs to GDP. #BudgetSpeech2025 pic.twitter.com/GlAoiVDMHv
— SABC News (@SABCNews) March 12, 2025
Godongwana says they are taking measures to protect vulnerable households. #BusgetSpeech2025 pic.twitter.com/eSlkDInMhl
— SABC News (@SABCNews) March 12, 2025
Godongwana on VAT increases: To raise the revenue needed, the government proposes to increase the VAT rate by half- a percentage point in 2025/26, and by another half-a-percentage point in the following year, this will bring the VAT rateto 16% by 26/27. . #BudgetSpeech2025 pic.twitter.com/m5E7H1qL2I
— SABC News (@SABCNews) March 12, 2025
