Latest news with #Medium-TermExpenditureFramework
The Star
28-05-2025
- Business
- The Star
Nigerian gov't says external borrowing within sustainable limits
ABUJA, May 28 (Xinhua) -- The Nigerian government said Wednesday that it will continue to borrow within manageable limits and per the country's debt sustainability framework while refuting allegations of overborrowing from concerned citizens. In a statement issued Wednesday in Abuja, the Nigerian capital, the Federal Ministry of Finance said the most populous African country has adopted a structured, forward-looking approach that facilitates comprehensive financial planning and avoids the inefficiencies of ad-hoc or reactive borrowing practices. The statement responded to reactions from citizens questioning a recent request from President Bola Tinubu to the National Assembly for the approval of the 2024-2026 external borrowing rolling plan, also known as the Medium-Term Expenditure Framework, under both the Fiscal Responsibility Act 2007 and the Debt Management Office Act 2003. Tinubu has requested the National Assembly's approval to secure external loans of 21.5 million U.S. dollars and 15 billion yuan, along with a grant of 65 million euros, as part of the Nigerian government's proposed external borrowing plan. The proposed borrowing will be sourced mainly from the country's development partners, including the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, the Export-Import Bank of China, and the Islamic Development Bank. "This strategic method enhances the country's ability to implement effective fiscal policies and mobilize development resources," the official statement said. "The plan outlines the external borrowing framework for both the federal and sub-national governments over three years, accompanied by five detailed appendices on the projects, terms and conditions, implementation period, and others." The borrowing plan does not equate to actual borrowing for the period or an automatic increase in the nation's debt burden, said the statement, noting that the actual borrowing for each year is contained in the annual national budget. In 2025, the external borrowing component is 1.23 billion dollars. According to the statement, the nature of the rolling plan means that borrowings are split over the period of the projects, with a large proportion of projects in the 2024-2026 rolling plan having multi-year drawdowns of between five and seven years, which are project-tied loans. It added that these projects cut across critical sectors of the economy, including power grids and transmission lines, irrigation for improving food security, fiber optics networks across the country, fighter jets for security, and rail and road infrastructure.
The Citizen
26-05-2025
- Business
- The Citizen
Tshwane plan to relocate east informal settlement dwellers unfolds
The Tshwane metro confirmed that the construction drawings for the establishment of the Pretorius Park Ext 40 Township are now being finalised and will soon be submitted to the relevant authorities to pave the way for development shortly. This move marks a step towards the long-anticipated relocation of residents from Cemetery View and Plastic View informal settlements in the east of Pretoria. The city also revealed that the Surveyor General Diagrams for the long-awaited township development have been approved. Metro spokesperson Lindela Mashigo said a multidisciplinary team was officially appointed on June 12, 2024, to drive the project. 'The team of engineers and specialists are currently busy with the planning phase, working on designs to prepare the land that will ultimately accommodate hundreds of families living in the fire-prone settlements.' The long-anticipated relocation of residents from Cemetery View and Plastic View informal settlements is a dawn that thousands of east ratepayers eagerly await. Once complete, Pretorius Park Ext 40 is expected to form part of the city's broader spatial integration plan, offering both government-subsidised housing and social rental units to residents currently living in unsafe and overcrowded conditions. Pretorius Park Ext 40 will integrate the poor into the affluent Garsfontein area, in pursuit of spatial transformation and integration principles espoused in the Spatial Planning and Land Use Management Act (Act No. 16 of 2013). East of Pretoria ratepayers have been calling on the municipality to relocate residents from informal settlements through legal efforts to evict them, having been in the courts for years with multiple failed eviction processes thwarted by Human Rights organisations. Pretorius Park will ultimately offer 863 housing units, 300 of which will be fully subsidised by the government. The remaining units will be allocated for social housing rental stock. The qualifying beneficiaries from Cemetery View (currently home to 866 households) and Plastic View (with over 900 households) will be relocated to the new development. Mashigo said a contractor will be appointed during the 2025/26 financial year. 'The project is still in the planning phase; the contractor will be appointed in the next financial year. The designs and construction drawings are underway currently,' said Mashigo. Previously, the municipality said a submission was made to the Gauteng Department of Human Settlements to fund the top structure construction under the current Medium-Term Expenditure Framework (MTEF). This will follow the installation of bulk infrastructure, including water, sewer, roads, and stormwater systems. The relocation of Cemetery View residents has been discussed for over a decade. In 2010, the city attempted to prevent land invasions by demolishing structures and evicting illegal occupiers at the Cemetery View informal settlement. However, after a court case brought to the North Gauteng High Court, the city was ordered to provide emergency relief in the form of temporary shelters. This led to a court settlement on August 18, 2010, requiring the city to eventually provide permanent alternative accommodation. The process has since faced multiple objections from neighbouring property owners, homeowner associations, and civil society organisations. The city had to revise and resubmit its township planning application in March 2020, which was only approved by the Municipal Planning Tribunal in August 2022. The final approval for the Conditions of Establishment and Layout Plan for Pretorius Park Ext 40 was granted on January 3 2023, clearing a major hurdle in the city's goal of building a formal, integrated community in the Garsfontein area. Mashigo said the city will expedite the implementation of Pretorious Park Ext 40 and ensure that the urban management activities are implemented on both informal settlements to prevent any further pollution and invasion. 'In the interim, Tshwane Metro Police Department is deployed on site to attend to any transgressions of law.' The city previously said it is pushing for the relocation move to be at least by 2029. Mashigo mentioned previously that the city has limited powers over evictions due to the existing court order, which makes it difficult for the city to implement certain measures. Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
IOL News
22-05-2025
- Business
- IOL News
Navigating South Africa's Budget 2025: key decisions in a stagnant economy
Explore the challenges and decisions facing South Africa's Budget 2025 as economists debate the implications of fiscal policies amidst a stagnant economy. Image: GCIS South Africa's economic outlook remains bleak, with National Treasury forecasting real GDP growth of just 1.7% over the Medium-Term Expenditure Framework (MTEF) period. Persistent structural constraints, weak investment confidence, and ongoing energy and logistics challenges continue to limit growth, raising serious concerns about fiscal stability. Finance Minister Enoch Godongwana has finally delivered South Africa's 2025 Budget Speech, following two prior setbacks that delayed the announcement. One attempt was blocked by legal action, while the second was derailed by coalition disputes over the now-withdrawn VAT increase proposal. The speech, originally scheduled for earlier this year, faced significant political and legal hurdles as government leaders struggled to find common ground on fiscal policy. Speaking after the tabling of the Budget, Anchor Capital economist Casey Sprake highlighted that the Treasury has had to revise revenue projections downward due to the scrapped VAT rate hike, which was abandoned for political reasons. To compensate, fiscal drag has been applied, meaning personal income tax (PIT) brackets have not been adjusted for inflation. This alone is expected to generate R49.4 billion over the next three years. Additionally, higher excise duties on alcohol and tobacco and a freeze on inflation adjustments to medical tax credits will add R5.8 billion in revenue. In place of the VAT hike, the Treasury has opted for inflation-linked increases to the general fuel levy, a decision seen as less politically contentious, as it spreads the tax burden more broadly. However, not all economists believe the government is making sound fiscal decisions. Theuns du Buisson, an economic researcher at the Solidarity Research Institute (SRI), describes the Budget as a continuation of poor economic policy, predicting ongoing economic stagnation. According to Du Buisson, Finance Minister Enoch Godongwana's approach to redistribution and structural transformation is misguided. 'This is, as always, a poor budget. Simply dividing a shrinking economy by taxing the rich—and, according to the minister, spending 60 cents of every rand on social relief—is not sustainable. It is certainly not something to be proud of,' says Du Buisson. 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 further argues that the income tax threshold unfairly classifies middle-class earners as wealthy. 'People earning just R7,979 per month are classified as 'rich' under this budget, as this is the point at which someone starts paying income tax.' Du Buisson also believes that the absence of a VAT increase is being wrongly framed as a revenue loss, rather than acknowledging the core issue: government spending is rising faster than economic growth. 'The overall tax rate is 25.2% of GDP. The minister needs an extra 1% of GDP to balance the budget. The simple solution? Grow the economy by 4%, and the shortfall disappears,' he argues. While the minister speaks of limited economic growth, Du Buisson contends that government policies are actively restricting growth potential. 'Personal income tax brackets have once again not been adjusted for inflation, shrinking disposable income. On top of that, fuel levies are increasing for the first time in three years, affecting nearly every cost in the economy. How can growth happen without affordable energy and adequate consumer spending?' he asks. Despite concerns around taxation and spending, there is some optimism about private sector involvement in infrastructure development. Solidarity notes that there is increasing space for business-led investment in transport infrastructure, which could help offset logistical inefficiencies that have contributed to the economy's sluggish performance. Meanwhile, UASA, a major trade union, has raised concerns about future tax burdens. 'The minister has noted that the 2026 budget will need to introduce new tax measures to raise R20 billion, which could further squeeze consumers and taxpayers," says Abigail Moyo, UASA spokesperson. Moreover, without a concrete plan for job creation, businesses will struggle to invest, limiting economic expansion and structural reform efforts. Outside of necessary spending allocations for health, education, state-owned enterprises (SOEs), security, and social relief, the Budget fails to offer any meaningful solutions beyond what has been presented in previous years, she says. `PERSONAL FINANCE
The Star
21-05-2025
- Business
- The Star
Cosatu critiques Finance Minister's Budget as insufficient for economic growth
Ashley Lechman | Published 7 hours ago Trade union, The Congress of South African Trade Unions (Cosatu) said on Wednesday that it does not think Finance Minister Enoch Godongwana's third Budget attempt was enough to stimulate growth for the country's economy. "We welcome government's decision to withdraw the proposed VAT hike as it would have been an unnecessary burden to workers struggling to cope with the rising costs of living. I t is a positive moment in our democratic evolution, when government led by the African National Congress, shows the political maturity and humility by responding positively to the concerns of Cosatu and society," Cosatu stated. The union added that it cannot support tax hikes upon the working class and the poor who are already highly indebted. "Whilst appreciating the scrapping of the VAT hike, we remain deeply distressed that for two years in a row, Personal Income Tax brackets have not been adjusted for inflation. This will see workers at the margins of the next tax bracket in danger of paying higher taxes when receiving their annual increases. This trend must be reversed. Whilst regretting the decision not to extend VAT exemptions for additional food items or provide further fuel price relief, we urge government to pursue additional measures to cushion indigent households from poverty, in particular expanding free electricity and water," Cosatu said. "The Federation commends the R4 billion boost to the South African Revenue Service's tax and customs compliance efforts. SARS has shown that it has the capacity to deliver. The R7.5 billion allocated to it over the Medium-Term Expenditure Framework (MTEF) is an important step towards enabling it to ramp up collection of the R800 billion in owed taxes and improving tax compliance by at least R60 billion annually. It is critical that SARS be given every possible support to achieve these tax compliance targets. The tax regime must be reviewed to provide relief for low-income earners and ensure wealthy individuals and companies pay their fair share," Cosatu added. Cosatu said that further discussions must take place on how the Reserve Bank's currency reserves can support the fiscus. "We welcome government's acknowledgment that bleeding the public services working-class communities and businesses depend upon is reckless and harmful to the economy. The 5.4% increase in expenditure over the MTEF and allocations to frontline services, in particular including the rolling out of Early Childhood Education to 700 000 learners and tackling the school infrastructure backlog, refurbishing 660 health facilities, investing in Home Affairs' capacity, Defence and Correctional Services will be a step forward to repair damage inflicted by previous austerity budget cuts. However more must be done," Cosatu said. The minister committed to hiring more teachers (1000 plus allocations to save 5500 existing posts), Home Affairs, police (4000), prosecutors (250) and border management officers, amongst other critical frontline personnel will boost public services. "But we remain deeply dismayed by the reduced low allocations for doctors (800) and nurses. The implementation of the public service wage agreement will help public servants heal financial wounds. We are concerned about the impact the loss of valuable skills and experience by public servants who opt for early retirement, may have upon the state's ability to provide public services. Government must move with speed to identify any ghost posts in the state, as well as boost effort to tackle corruption and wasteful expenditure," Cosatu said. The union said that it applauds the outstanding work done by Eskom and municipal workers to overcome load shedding. "We are pleased that the debt relief package has provided Eskom breathing space to ramp up maintenance. It is critical that Eskom be given more support to tackle corruption, wasteful expenditure, cable theft and bring on board new generation capacity. The allocation of R219bn for energy infrastructure will be an invaluable boost as will the electrification of an additional 300 000 homes. These measures must translate into affordable electricity if the economy, in particular mining and industry are to survive and grow," Cosatu said in a statement. "The turnaround of South African Airways is testimony that state-owned enterprises can be turned around to once again become enablers of economic growth. Whilst government is naturally reluctant to provide further debt relief to SOEs, Transnet should be assisted to settle its debt to free up capital for the modernisation of its port and railway network as these will unlock the mining, manufacturing and agricultural sectors, creating thousands of badly needed jobs and boosting state revenue. We are concerned by the reduction to R12.7 billion for Metro Rail's signal upgrades but hope its total R66 billion allocation will secure its efforts to return to full capacity, thus enabling 10 million workers and commuters travel quickly and save money on transport," the union added. "Treasury needs to honour its court signed business rescue agreement to provide the Post Office with the long delayed R1.8 billion injection. This should not be delayed over the MTEF. We urge government to table the Road Accident Fund (RAF) and Benefits Scheme Bills at Parliament as part of a package of interventions to set the RAF on a sustainable path and ensure its funds are directed to the poor not the wealthy, let alone insatiable ambulance chasing lawyers," Cosatu added. Cosatu said, "We welcome the various progressive provisions in the Budget, which Cosatu campaigned for, including allocating 61% for social wage expenditure. We are, however, disappointed by the failure to show any relief for the 8 million SRD Grants and government's continued shyness to drastically ramp up sufficient resources to support SMMEs, industrialisation and export sectors, as well as public employment programmes." " The Budget does not foresee growth rising beyond 2% over the next decade whilst we desperately need at least 3% growth if we are to turn the corner on unemployment. We dare not normalise a 43.1% unemployment rate. This is a ticking time bomb that will one day explode and the price of picking up the pieces will be far greater than we can afford," Cosatu added. The union said it is calling upon Parliament and Government in the run up to the MTBPS and the 2026 Budget, to initiate a national dialogue on what are our expenditure priorities and what we can live without, and what are the acceptable and unacceptable revenue streams to fund these. "We cannot afford to continue to stumble along a meek path of business as usual and expect better results. A bold and decisive Marshall Plan is needed if we are to capacitate the state, stimulate growth and slash unemployment. We do not have endless time to make the bold changes our many socio-economic crises demand. COSATU will be seeking further engagements with government on these burning matters," the union further stated.
eNCA
21-05-2025
- Business
- eNCA
Budget 3.0 brings VAT relief, sin tax burns, and an unexpected fuel levy hike
CAPE TOWN - Finance Minister Enoch Godongwana put on a brave face as he presented his third budget proposal for the 2025/26 financial year. His first budget speech was delayed due to unhappiness among GNU partners over the proposed VAT hike. The second resulted in court action. On Wednesday, Godongwana set the tone by clarifying that VAT would remain at 15%. This left the minister with a big shortfall to make up for. He chose to fill it with fuel levy. Next month, petrol goes up by 16 cents a litre and diesel by 15 cents. This is the first fuel levy increase in three years. Godongwana said this alone would not close the fiscal gap over the medium term. The 2026 budget will therefore need to propose new tax measures aimed at raising R20 billion. Alcohol drinkers and smokers must also brace themselves for a hefty sin tax hike. Cigarettes will go up by more than a rand for a pack of 20, while cigars increase by around R8.50 per 23 grams. Spirits rise by almost R6 for a 750ml bottle. The food basket also takes a knock. Godongwana said the zero-rated basket – which was expanded to include edible offal, specific meat cuts and canned vegetables – would also shrink. Godongwana also committed to more transparent public spending. He said government must ensure that every rand collected is spent on its intended purpose. 'We found potential savings of R37.5 billion over time, through improved oversight and operational changes…' he explained. 'Going forward, underperforming programmes will be closed as the 2026 Medium-Term Expenditure Framework budget process undergoes redesign," Godongwana said. The minister also said authorities were making progress in the war against corruption. In the past five years, the Asset Forfeiture Unit (AFU) recovered over R5 billion in criminal assets. The AFU also obtained freezing orders for R14.2 billion worth of assets related to state capture cases. Godongwana did admit that there were long-standing spending pressures, some of which cannot be funded within the current purse. Among them are the Passenger Rail Agency of South Africa stock fleet renewal programme, as well as HIV/Aids programmes that were previously funded by the US government.
