Treasury commits to reducing deficit, debt-service costs in 2025 Budget

Finance Minister Enoch Godongwana before the 2024 Budget Speech. Photo: Ayanda Ndamane / Independent Newspapers

Finance Minister Enoch Godongwana before the 2024 Budget Speech. Photo: Ayanda Ndamane / Independent Newspapers

Published Jun 24, 2024


The National Treasury has made a commitment to maintain the current fiscal strategy, which aims to stabilise public finances, and ensure sustainable and inclusive economic growth on the back of anticipation that the incoming administration will bring its own perspectives and policies.

Treasury on Friday said that it has recognised the need for a comprehensive review of the budget process with the objective to identify and implement reforms that will enhance the efficiency, transparency, and effectiveness of the budget process.

Treasury said the 2025 Budget will see a debt-stabilising primary surplus achieved in 2025/26, a reduction in the fiscal deficit to pre-Cov-d levels, and a stabilisation of debt-service costs as a percentage of revenue.

“Resources will be available only within the parameters required to meet the objectives of the medium-term fiscal strategy as outlined in the 2024 Budget Review,” Treasury said.

“In this regard, should the economic outlook remain the same, no additions will be made to the overall envelope. In instances where spending may be accommodated by unforeseen or higher-than-expected revenues, permanent increases to spending will be avoided.

“Any spending pressures must first be funded from current baselines and programmes that have not delivered their expected outcomes, or through re-prioritisation, either within the department’s or public entity’s budget, or from other departments’ or public entities’ budgets.”

The current fiscal strategy includes a reconfiguration of the Budget Facility for Infrastructure to further expand the pipeline of projects and to test alternative financing and funding models separate from the normal budget process.

The intention is to use government resources more efficiently to leverage financing from the private sector, as well as development and international finance institutions. In this way, limited public resources can catalyse more funding, capacity and capability to fast-track infrastructure provision and improve its effectiveness.