Johannesburg, 18/10/2023 (MAP) – South African Minister of Finance, Enoch Godongwana, painted a bleak picture of the economic crisis currently engulfing South Africa, emphasizing that the National Treasury faces difficult trade-offs: either raise taxes or borrow more money to finance the economy.
Speaking on Tuesday at the National Treasury’s presentation of its annual report to Parliament’s Finance Committee, Godongwana defended the government’s planned spending cuts, saying the alternatives are less acceptable.
« It’s difficult to raise taxes during the year. At the same time, our costs and borrowing levels have become very high, » he explained.
Referring to the measures taken to close the country’s budget deficit, the minister said that his department advocates an approach combining spending reductions while increasing certain borrowing in a sustainable manner.
In South Africa, the budgetary crisis has reached a critical level, forcing the executive to resort to budgetary austerity, at the risk of arousing the ire of civil society and the business community.