2024 Budget Speech Analysis

On Thursday, Finance Minister Enoch Godongwana delivered the National budget for 2024, in which he highlighted the global and local economic outlook, public finances and budget allocations for the year. The budget favoured fiscal continuation and consolidation over any pre-election populist decisions. He also announced the immediate utilisation of the gold and foreign exchange contingency reserve account (GFECRA) which is expected to reduce government’s borrowing requirement.

The National Treasury still expects a main budget deficit of 4.7% of GDP in FY23/24, premised on revenues reaching the Medium-Term Budget Policy Statement (MTBPS) forecasts and spending slowing from the implied overshoot in the fiscal year to date.

Treasury still foresees a primary budget surplus (excluding Eskom’s debt relief) from FY23/24. Gross government debt is expected to peak at 75.3% of GDP largely owing to the use of the GFECRA (R100bn in FY24/25 and R25bn in FY25/26 and FY26/27 each). This is positive for the local bond market, since the GFECRA-related injections somewhat substitute the need for more borrowing.   Despite the positives, debt-service costs will amount to R350-440 bn over the next four years.  Debt‐service costs consume a greater share of the budget than social development, health, community development, economic development or peace and security.  In 2023/24, for the first time since 2000/01, debt‐service costs absorb more than 20 cents of every rand collected in revenue.


National Treasury allocated R1.389bn to the direct National Health Insurance (NHI) grant, of the total R848bn allocated to the Department of Health for the 2024 medium-term expenditure framework (MTEF) period. In his 2024 Budget speech, Finance Minister Enoch Godongwana said the NHI allocation demonstrates government’s commitment to the policy. However, several ‘system-strengthening activities’ seen as key enablers of an improved public healthcare system must be undertaken. The minister highlighted that these activities are already underway, but need further development before the NHI can be fully rolled out.

Unfortunately for households, personal income tax rates and tax brackets were left unchanged from 2023/24 and will not be adjusted for inflation. This will raise revenue via personal income tax by another R16-18bn over the next 3 years.  Higher excise duties are to be imposed on alcohol (6.7% to 7.2%) and tobacco products (4.7% to 8.2%). For the third consecutive year, no changes were made to the general fuel levy or the Road Accident Fund levy. Value-added tax (VAT) was left unchanged. However, carbon tax increased from R159 to R190 per tonne of CO2 equivalent from 1 January 2024. The carbon fuel levy will increase to 11c/litre for petrol and 14c/litre for diesel effective 3 April 2024.  There is a bit of a sting in the budget for corporates: South Africa will implement a global minimum corporate tax, with multinational corporations subject to an effective tax rate of at least 15 per cent, regardless of where its profits are located.

Social relief

Following President Cyril Ramaphosa’s commitment in the State of the Nation Address (SONA), delivered earlier in the month, to “extend” and “improve” the social relief of distress grant as a long-term aim rather than an immediate target the following changes were announced:

  • R100 increase to the old age, war veterans, disability and care dependency grants;
  • R50 increase to the foster care grant;
  • R20 increase to the child support grant; and
  • Work is currently underway to improve the COVID-19 Social Relief of Distress Grant by April this year.

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