South Africa's fiscal debt to GDP expected to peak at 77%
JOHANNESBURG - South Africa's fiscal debt to GDP is expected to peak at 77% this year, as the government continues to battle to get public debt under control.
The alarming debt figure was announced by Finance Minister Enoch Godongwana while tabling the May budget at the National Assembly on Wednesday.
This is higher than previous projections when debt to GDP was estimated to peak at 76% during the previous budgets, making it the highest ever.
Godongwana said the latest revision was partly due to the impact global trade tensions are likely to have on South Africa's growth forecast.
While Godongwana denies the government is losing the war against public debt, he admits it also cannot be downplayed.
'Debt service costs remain high, amounting to more than R1.3 trillion over the next three years. Put differently, this means in 2025/26 alone, we are spending around R1.2 billion per day to service our debt. We must agree this is unacceptable. This is more than what we spend on frontline services such as health, the police and basic education.'
ALSO READ: Govt's service debt costs must be renegotiated - Maswanganyi
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
15 hours ago
- IOL News
Jacob Zuma's Double-Edged Spear Thwarts Floyd Shivambu's Ambition
MKP President Jacob Zuma gives journalists the thumbs up at a media briefing held in Durban on June 4, 2025. The Party announced the removal of its Secretary-General Floyd Shivambu and his redeployment to the National Assembly as an ordinary MP. Image: Tumi Pakkies/Independent Media Zamikhaya Maseti The firing of Floyd Shivambu yesterday did not come as a surprise. In truth, Floyd penned his political obituary the day he walked into the MK Party and emerged as its General Secretary. That was not a promotion, it was a political coffin lined with velvet. But the real reckoning is still coming. The VBS scandal, so long buried under layers of delay, distraction, and legal gymnastics, will soon come to trial. And when it does, Jacob Zuma will do what he always does, drop the dead weight before it begins to stink. He will ask Floyd to step aside in the interest of the MK Party. That will be the final burial. Hamba Kahle Mkhonto, not with a song, but with a court docket. Floyd Shivambu's political execution was triggered by his clandestine trip to Malawi to attend a church service led by none other than Shepherd Bushiri a fugitive preacher facing serious allegations of rape, sexual exploitation, and financial fraud. That was too far even for Zuma's elastic ethics. Floyd Shivambu, the self-proclaimed Marxist sitting cross-legged in the sanctuary of a Pentecostal profiteer, clapping hands for a man accused of sodomising and brutalising young girls. This is not merely a lapse in judgment, it is a moral implosion. Those who read and understand the Marxist-Leninist Theory, not just name-drop, know that religion is not just 'the opium of the people.' It is the ideological glue of the very Bourgeois order Marxism exists to oppose. You cannot be a revolutionary on Monday and a prophet's disciple on Sunday. You cannot shout 'radical economic transformation' at Parliament and whisper 'Amen' at the altar of a millionaire scammer who preaches submission to the Capital, patriarchy, and magical thinking. Floyd failed the revolutionary morality test. His trip to Bushiri's church was not a mere detour. It was a confession, silent but deafening, that he had no centre. This is where Jacob Zuma, for all his faults, showed leadership and political decisiveness. Love him or hate him, and most people fall somewhere in between, he has demonstrated that, despite his numerous challenges and well-documented shortcomings, in the MK Party, his political outfit, he will not tolerate ideological bankruptcy or political dishonesty. By firing Floyd Shivambu, Zuma did what many South Africans expected the moment Shivambu returned from that ill-advised pilgrimage to Bushiri's church. It was not just poor judgment; it was a violation of public morality. And Zuma, sensing the national mood, played his move with chilling precision. One must admit, that Zuma is, without a doubt, a political chess master. He understands the terrain. He studies the map. He waits. And then he strikes. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ He did not flinch at the first sound of public outrage. He did not rush to satisfy the noise of social media or the murmurs of political insiders. No. Zuma sat still. He waited for the moment when he, not the nation, was ready. Then he acted. And when he did, the message was clear: in the Kingdom of Nkandla, there is only one strategist, only one tactician, and only one general. He understands the art of war, and more importantly, the art of timing. Shivambu may have embarrassed the MK Party publicly, but Zuma buried him strategically. There is, however, a serious downside to Zuma's political strategy; he is wielding a double-edged spear. Yes, he is decisive. Yes, he reads the battlefield well. But the very authoritarianism that gives Zuma the upper hand in the short term may well lead to the MK Party's long-term implosion. Undoubtedly, many within the MK Party are now unsettled. Their futures hang in limbo. The spectre of arbitrary dismissal haunts even the loyalists. No one is safe not from embarrassment, not from demotion, not from the sudden twist of a knife dressed as a song. This is not leadership by consensus. It is Stalinism dressed in camouflage. And Stalinism, as history has shown us, always leads to demoralisation, disillusionment, and eventually, decay. The full swing of musical chairs, where today's hero is tomorrow's exile, will only erode talent and collapse morale. Let's not forget these are men and women with families, responsibilities, and dreams. The stress of living under constant political threat, especially in this suffocating economic climate, will eventually take its toll on them, individually and collectively. This tired line that 'political deployment is not employment' is outdated, exhausting, and frankly, dishonest. It fails to acknowledge that politicians are human beings too, with aspirations, commitments, and material needs. To pretend otherwise is to invite hypocrisy. Political deployment is labour, and those deployed are not pawns; they are professionals, cadres, and citizens. They deserve respect, not permanent precarity. It may appear, for now, that members of the MK Party are content with these purges. That they clap as Comrades are fired. But don't be fooled. That is fear, not approval. That is survivalism, not loyalty. Zuma's Stalinist approach is unsustainable and will inevitably face a serious internal ideological offensive, as there are tried and tested Communists within the MK Party. If they surrender their ideological discipline just to stay in Zuma's good graces, then they are betraying more than themselves. They are betraying the memory of the Communist International. They are betraying a generation. And if that is the path the MK Party takes, then history will not be kind. As I conclude, it is imperative to surface what might well be the most consequential development regarding the MK Party: it now finds itself, by sheer electoral outcome and political reconfiguration, as the Official Opposition Party. This status is not merely symbolic; it carries with it a constitutional weight and a historic responsibility. With the Democratic Alliance (DA) having opted to join the Government of National Unity (GNU), the DA has effectively vacated the oppositional bench it once occupied with forceful intensity. The MK Party, however, has not yet settled into this new role. It is not combative, nor intellectually coherent, in the manner the DA once was in opposition. The Economic Freedom Fighters (EFF), with all their contradictions, are currently outpacing the MK Party in opposition performance.
Mail & Guardian
a day ago
- Mail & Guardian
EFF loses fuel levy court challenge
EFF leader Julius Malema. (X) The The party's application, lodged against Finance Minister The EFF argued that it was unlawful because it was not introduced through a Money Bill, as required by section 77 of the Constitution. The party described the court's ruling as 'a betrayal of the poor and the working class' and accused Godongwana's office of sidestepping democratic procedures in the management of public finances. 'Taxation without representation is arbitrary and unconstitutional,' the party said. The ANC-led government of national unity was doing everything in its power 'to protect the interests of those who continue to benefit from the apartheid economy, while subjecting the masses of our people to economic misery'. Godongwana has insisted that he acted within existing legislation. In his He added that it had been frozen since 2021, and the increase was necessary to preserve the real value of the levy in the face of inflation and declining revenue. He warned that halting the increase would result in a R3.5 billion shortfall for the fiscus, necessitating further borrowing, spending cuts or alternative tax increases. 'The fuel levy is not a new tax. It is a regulatory adjustment falling under existing legislation and its increase does not require a Money Bill,' Godongwana argued in the affidavit, adding that freezing the levy any further would compromise the integrity of the budget and limit the state's ability to deliver services. The court's ruling allowed the increase to proceed and, on Wednesday, fuel prices rose accordingly for the month of June. However, a dip in global oil prices and modest strengthening of the rand brought slight relief for motorists. EFF leader 'It is not the EFF that got rejected; it is the people of South Africa who lost. When you increase fuel, you increase everything, transport, food, the cost of living. Our people are already suffering. This is an extra blow to the working class,' he said. The EFF would not abandon the matter, Malema said, indicating that it was considering further legal avenues, as well as a legislative push in parliament to close loopholes that allow the treasury to act unilaterally. EFF treasurer general Omphile Maotwe, who has led the party's engagements on budget matters, reiterated its position that the matter should have come before parliament. 'The levy seeks to recover revenue after the courts invalidated the unlawful VAT increase proposed earlier this year. By using the Customs and Excise Act to bypass section 77 of the Constitution, the minister is undermining the democratic function of parliament and the people's right to participate in fiscal policy decisions,' she said. Maotwe said the EFF would submit proposals to amend the relevant sections of the Customs and Excise Act and the Money Bills Amendment Procedure and Related Matters Act to ensure no future taxation could be implemented without a parliamentary vote. While the EFF's application was dismissed, legal observers say the court did not definitively rule on the constitutional questions raised, which could leave the door open for further challenge. While the government is technically within its rights to use the Customs and Excise Act to amend levies, the broader question of public accountability in tax decisions remains unresolved, constitutional law expert professor Pierre de Vos said. 'There's a grey area here. The Constitution requires that money bills originate in the National Assembly, but there are long-standing statutes like the Customs and Excise Act that give the executive certain powers. Whether those powers are now unconstitutional is a debate we may see return to the courts.' The EFF said it would use all platforms, legal and political, to hold the treasury accountable. 'We will not rest while unelected officials continue to impose taxes behind the back of parliament. The people must have a voice in every cent that is taken from their pockets,' Malema said.
IOL News
a day ago
- IOL News
Oops! Miscommunication sees construction start on bakery but at the wrong site in Durban
Homeland Security SA, a private security company with the Glenwood Urban Improvement Precinct (UIP), at the Davenport Park site in Umbilo. The metal rods protruding from the ground is where the concrete structure was going to be built. In the background is a community vegetable garden. Image: Tumi Pakkies/ Independent Newspapers The eThekwini Municipality's R6.7 million community bakery development programme got off to a bad start when construction started on one of them but on the wrong plot of land in Glenwood on Wednesday. In December 2024, the Economic Development and Planning Committee received support from council to fund five bakeries in ward 01: KwaXimba, Ward 94: KwaMakhutha, Ward 32: Albert Park, Ward 61: Tongaat and Ward 107: Ntuzuma/lnanda, during the 2024 and 2025 financial year. The cost per bakery container is R1.3 million. Two years ago Davenport Park was a crime hotspot and based on a park adoption agreement with the parks department, the Association Montessori International (AMI) and Umbilo Business Association(UBA) regenerated this ward 33 park. The lower Glenwood area has become notorious for prostitution and drug dealing on vacant land, in abandoned buildings and on street corners. The UBA policy director Ian Campbell-Gillies said three full time gardening jobs funded by both AMI and the UBA resulted in an urban farming operation of outstanding success in terms of regenerating the area and lowering crime. According to sources, a group of men arrived in a bakkie with building material at Davenport Park alongside the urban farming operation, a vegetable garden, on Wednesday. The men began constructing a cement pedestal for the bakery operation before it was halted when Durban Metro Police arrived together with parks department officials and the ward councillor. Following a discussion between ward 32 Councillor Protas Ngonyama and ward 33 Councillor Fran Kristofer the matter had been resolved after it was discovered that there could have been a misunderstanding with ward demarcations. Both councillors initially declined to comment further but Ngonyama later said that the bakery project would be placed on Dunkirk Park, within his ward in Umbilo. In a report to eThekwini council, it stated that the bakery programme is critical for achieving rural and township recovery objectives. The programme will also assist the city to contribute towards job creation and creation of sustainable livelihoods through supporting the development of Township-Based Enterprises, Co-operatives and Small, Medium, and Micro Enterprises (SMMEs). The report stated that the programme supports unemployed women, youth, people with disabilities and veterans, through the provision of fully equipped container bakeries and capacitating them to run sustainable businesses. This is aimed at affording them with proper and decent working facilities to produce high quality bakery products, easy access to their markets and creating employment within their areas. The report stated that the development of bakery facilities/industry within eThekwini is gaining momentum. Other benefits from the programme were: To enable customers attraction and diversification of product offerings Production of high-quality baked goods such as, bread, rolls and muffins combination of nutrition, convenience and luxury Linkages with other initiatives or complementing programs such soup kitchens community gatherings, local traditional events, church gatherings, stokvels School nutrition Provision of capacity building initiatives such as mentorship, business management and technical training [email protected]
