When the Minister of Finance, Enoch Godongwana, delivered his first budget speech on Wednesday, he revealed that government’s debt has reached a total of R4.3 trillion – and it is expected that this figure will increase to R5.4 trillion over the medium term.

“This huge sum is owed to lenders domestically and around the world. It incurs large debt-service costs; averaging R330b annually over the Medium Term Expenditure Framework. These costs are larger than spending on each of health, policing or basic education.

“For this reason and to support the economic recovery, in this budget we are reducing the fiscal deficit and stabilising debt.”

The minister said that R308b will be allocated to bail out failing state-owned companies and confirmed that there are continued requests for financial support from them.

“Government continues to support Eskom to remain financially sustainable during its transition. To date, Eskom has been provided with R136b to pay off its debt, with a further R88b until 2025/26. We acknowledge, however, that Eskom is faced with a large amount of debt that remains a challenge to service without assistance.”

Godongwana said the National Treasury is working on a sustainable solution to deal with Eskom’s debt in a manner that is ‘equitable and fair to all stakeholders’.

The minister furthermore said government wants to keep money in the pockets of South Africans.

He announced R5.2b in tax relief to help support the economic recovery, provide some respite from fuel tax increases and boost incentives for youth employment.

“To provide some relief to households, no increases will be made to the general fuel levy on petrol and diesel for 2022/23. This will provide tax relief of R3.5b to South Africans.”

Read the minister’s full speech here.