As the 2025 Budget speech approaches, Casey Sprake, Chief Economist at Anchor Capital, warns that failure to address critical issues could deepen South Africa’s economic instability.
Citizens should closely follow Finance Minister Enoch Godongwana’s address on March 12, as it will shape the country’s financial future.
As South Africa eagerly awaits the tabling of the 2025 Budget, Sprake has highlighted several key areas for citizens to monitor closely.
According to Anchor Capital, the following issues should be at the top of every South African’s wishlist:
Funding of Anti-Corruption Agencies
Sprake stresses the importance of maintaining or even increasing budgets for the National Prosecuting Authority (NPA) and the Special Investigating Unit (SIU).
Strengthening these institutions is crucial in the ongoing fight against corruption, state capture, and corporate fraud.
Adequate funding will signal the government’s commitment to accountability and ensure these agencies can continue their vital work.
Fiscal Consolidation and Debt Management
South Africa’s debt-to-GDP ratio is set to exceed 75% in 2025/26, according to the National Treasury’s 2024 Budget Review.
Sprake underscores the urgent need for a robust plan to manage and reduce debt accumulation.
Excessive borrowing could strain public finances and erode investor confidence, making fiscal prudence crucial.
Withdrawal of US Aid
The official cessation of US financial support to South Africa raises concerns about how the government will manage the gap left by this loss of foreign assistance.
The withdrawal could affect vital funding for health, slowing progress in these areas.
Improving the Ease of Doing Business in South Africa
Sprake argues that the 2025 Budget must prioritise measures to enhance South Africa’s investment climate.
Reducing bureaucratic inefficiencies and improving infrastructure reliability are essential for fostering job creation and stimulating economic growth.
This includes simplifying business operations to boost growth and positively impact the economy.
Local Government Financial Instability
Municipal financial distress remains a significant issue, contributing to poor service delivery and the deterioration of infrastructure.
Sprake urges the budget to provide a clear strategy to support municipalities, restore fiscal discipline, and improve governance.
Failure to do so could exacerbate local service delivery problems and undermine public trust in government.
The Future of the Social Relief of Distress (SRD) Grant
On the social front, the future of the SRD grant remains uncertain.
This temporary relief, which has assisted millions of unemployed South Africans, could either be extended or transformed into a formal Basic Income Grant.
Sprake urges the government to clarify its position on this matter, as the decision will have significant implications for poverty alleviation efforts and fiscal sustainability.
Transparency in the funding of New Legislation
The passage of the National Health Insurance (NHI) Bill and the Expropriation Bill requires careful financial planning.
Sprake stresses the need for transparency regarding how these policies will be funded, urging South Africans to scrutinise the budget for details.
This is vital to ensure that the implementation of these ambitious reforms does not place undue strain on an already stretched budget.
As the 2025 Budget looms, what aspects of the budget are you most concerned about?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
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