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The South African
2 days ago
- Business
- The South African
HOW government ineptitude wiped out R127 billion in TWO months
In unprecedented circumstances for the South African government, the country's predicted GDP fell by R127 billion between March and May 2025. How can anyone forget that Finance Minister Enoch Godongwana under GNU needed three stabs at tabling a fiscal budget in 2025? Initially, the Finance Minister's first Budget Speech was cancelled on 19 February 2025. Until he finally delivered his first address on 12 March 2025. In it, the Minister pegged South Africa's economic growth at an average of 1.8% over three years. Nearly 45% of residents receives some form of SASSA grant, which many argue is creating unsustainable dependency on social welfare. Image: File However, government saw that budget framework overturned in the court proceedings over the controversial VAT increases. And the process needed to begin again. Therefore, on 21 May 2025, Godongwana delivered an updated 2025 Budget. and in it GDP growth had weakened to 1.6% over three years. That 0.2% may not sound like a lot less, but over three years it represents R127 billion, reports Daily Investor . 'Global growth has faltered, and South Africa's economic outlook has also weakened, with GDP expected to grow by only 1.4% in 2025. Since the 2025 Budget Review publication in March, greater uncertainty and trade fragmentation have contributed to a weaker economic outlook,' justified Minister Godongwana. Is GNU helping or hindering South Africa, in light of the 2025 fiscal budget fiasco? Image: File However, on the face of it, aren't' economic circumstances improving? Eskom's power supply to the country is better than ever and fuel prices have been dropping all year. The trade feud with the United States government looks to be in check (for now) and there have been interest rate cuts across the board. So, why the sustained bleak outlook? Critically, the government spends the most money each year on two things: Servicing debt and social welfare. Neither of which create jobs to bring any money back into government coffers. Likewise, the International Monetary Fund (IMF) recently cut its economic growth forecast for South Africa to just 1%. Way lower than the anticipated 1.6%. And if the South African economy only grows by 1%, as the IMF predicts, even this subdued budget will have a big hole. As such, if government is forced to borrow yet more money, the already high debt-to-GDP ratio will only worsen … Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
06-05-2025
- Business
- IOL News
Are you falling for deepfake investment scams? Momentum Group warns South Africans
Momentum Group, has warned that scammers are using fake videos to scam people One of South Africa's largest financial services companies, Momentum Group, has warned that scammers are using fake videos, messages, and social media profiles to pose as the company and its employees to trick people into fake investment schemes. The scammers reportedly use popular platforms such as WhatsApp, Facebook, and Telegram to target unsuspecting South Africans. According to Ravi Govender, Chief Digital and Technology Officer at Momentum, the scammers are leveraging highly convincing manipulated content to promote fraudulent investment schemes. 'Alarmingly, the manipulated content looks or sounds realistically life-like, making it increasingly difficult for the public to differentiate between what is real and likely versus fake,' Govender said, according to the Daily Investor.
