Minister of Finance Enoch Godongwana today delivered the 2024 Medium Budget Policy Statement (MTBPS).
The MTBPS plays an important role by providing a mid-year review of fiscal performance around the targets set in the February Budget, noting any reallocations or adjustments to spending that have become necessary since the Budget was approved.
Following the Minister’s address, Neil Roets, CEO of Debt Rescue said that there should be deep concern for the South African consumer.
“There is a deep concern for the South African consumer, particularly in light of the recent Medium-Term Budget Policy Statement (MTBPS). While the government’s outlined strategy emphasised macroeconomic stability and inclusive growth, I believe it’s crucial to address the potential pitfalls that could negatively affect the everyday lives of our citizens,” Roets told Business Report.
“The global economic forecast, projecting growth at only 3.2% for 2024 and 2025 paired with rising geopolitical tensions, underscores a precarious international landscape. South Africa as an emerging market, is particularly vulnerable to these external shocks. Conflicts in regions like the Middle East and Eastern Europe can disrupt trade flows, increase inflationary pressures, and ultimately diminish consumer confidence,” he further added.
“It’s vital that our government not only acknowledges these risks but also prepares robust contingencies to safeguard our economy and its most vulnerable citizens. Domestically, the forecasted GDP growth of 1.1% in 2024, down from earlier estimates, should raise alarms. Such stagnation suggests that many South Africans will continue to grapple with economic hardships, particularly as the cost of living escalates. A mere average growth rate of 1.8% over the medium term is insufficient to elevate the standard of living for the majority of our population,” Roets said.
The Debt Rescue boss said that the need for more inclusive growth is urgent, and it must translate into real, tangible improvements in the lives of South Africans.
“This being the first budget statement presented under the auspices of the Government of National Unity (GNU), expectations are high. It would therefore be preferable for the government to address the potential pitfalls, rather than ignoring them. Although we understand the need for a basic income grant, it is only through inclusive growth and a stable economic environment that leads to investment and creates job opportunities can we foster the hope and resilience needed to navigate these challenging times,” Roets said.
“The budget’s emphasis on infrastructure investment and structural reforms is commendable. However, the reality is that many citizens are struggling under the weight of existing debt. High debt levels and increasing costs of living require immediate relief measures. It is essential that the government considers more aggressive support strategies for consumers facing financial distress,” Roets added.
He said that the focus on enhancing public infrastructure is vital, yet it is equally important that these initiatives do not come at the expense of essential social services.
“The proposal to maintain spending on health, education, and social protection is crucial, as these services are lifelines for many South Africans. However, the increasing burden of debt servicing—projected to consume a staggering portion of government revenues—must be addressed. If left unchecked, this will only exacerbate the financial strain on households. As we move forward, I urge the government to ensure that its fiscal strategies prioritise the well-being of consumers,” Roets said.
“The promise of a brighter economic future should not only be an aspiration but a commitment backed by actionable policies that alleviate the pressures faced by ordinary South Africans. Only through inclusive growth and a stable economic environment can we foster the hope and resilience needed to navigate these challenges,” Roets said.
BUSINESS REPORT