---
title: "Debt, taxes and a Sarb lifeline: What you need to know about Budget 2024"
description: "Some of the highlights of Budget 2024 presented on Wednesday, 21 February, by Finance Minister Enoch Godongwana:"
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "BUDGET IN A BOX"
author: "Ed Stoddard"
author_url: "https://www.dailymaverick.co.za/author/ed-stoddard/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-02-21-budget-speech-2024-tax-debt-sarb/"
published: "2024-02-21T17:09:09"
updated: "2024-02-22T07:39:37"
lang: "en-ZA"
word_count: 415
---

# Debt, taxes and a Sarb lifeline: What you need to know about Budget 2024

> Some of the highlights of Budget 2024 presented on Wednesday, 21 February, by Finance Minister Enoch Godongwana:

By Ed Stoddard · Published 21 February 2024, 19:09 SAST · Updated 22 February 2024, 09:39 SAST

## Key points
- In a fiscal juggling act, South Africa dips into its piggy bank for R150-billion, hikes taxes on booze and smokes, and leaves struggling SOEs to fend for themselves, while wrestling with a worsening budget deficit and a sluggish economic growth forecast.
- Sarb lifeline: R150-billion to be drawn from GFECRA over three years, with legislation tabled on 21 February.
- Debt/deficits: Budget deficit for 2023/24 projected to worsen from 4% to 4.9% of GDP, with debt peaking at 75.3% of GDP in 2025/26.
- Domestic economic growth: Growth for 2034 revised down to 0.6%, with an average of 1.6% per year expected between 2024 and 2026.
- Taxes: Measures to raise R15-billion in 2024/25, including above-inflation increases for alcohol and tobacco products, and a carbon fuel levy increase.

## Content

#### **Sarb lifeline**

Over the next three years, R150-billion will be drawn from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA). The [South African Reserve Bank (Sarb)](https://www.resbank.co.za/en/home) holds these funds on behalf of the Treasury. The amount currently stands at just more than R500-billion. The necessary legislation, the GFECRA Defrayment Bill, was tabled on Wednesday, 21 February.

#### **Debt/deficits**

Compared to a year ago, the budget deficit for 2023/24 is estimated to worsen from 4% to 4.9% of gross domestic product (GDP). This is seen falling to 4.5% of GDP and to 3.3% by 2027, largely because of the GFECRA funds. The overall debt burden is now expected to peak at 75.3% of GDP in 2025/26, down from 77% previously.

#### **Domestic economic growth projection**

The estimate for economic growth in 2034 has been revised down to 0.6% from 0.8% previously. Between 2024 and 2026, growth is projected to average a sluggish 1.6% per year.

**Read more in Daily Maverick:**[Government to squeeze an additional R15-billion revenue out of struggling consumers](https://www.dailymaverick.co.za/article/2024-02-21-government-to-squeeze-an-additional-r15-billion-revenue-out-of-struggling-consumers/)

#### **Spending**

In 2024, debt interest payments amounting to R382.2-billion is the second largest expenditure item, after the R387.3-billion for social development. Basic Education is allocated R324.5-billion, and Health R271.9-billion for the 2024/25 financial year.

#### **Revenue**

At R1.73-trillion, tax revenue for 2023/24 is R56.1-billion lower than estimated in the 2023 Budget. The shortfall is largely due to the decline in corporate profits and revenue from taxes on mining.

**Read more in Daily Maverick:**[Motoring sector finally gets 150% rebate on investment in new electric vehicles, but only in 2026](https://www.dailymaverick.co.za/article/2024-02-21-budget-150-rebate-on-investment-in-electric-vehicles-in-2026/)

#### **Taxes**

This Budget contains tax measures to raise R15-billion in 2024/25 to alleviate immediate fiscal pressure and cut debt. This will be done by not adjusting the tax brackets, rebates and medical tax credit for inflation.

For alcohol products’ excise duties, above-inflation increases of between 6.7 and 7.2% for 2024/25 are proposed. Taxes on tobacco products will also be hiked, raising the price of a pack of smokes by 97 cents.

The carbon fuel levy will increase to 11 cents per litre for petrol, and 14 cents per litre for diesel, effective from 3 April 2024.

#### **SOEs**

There are no more lifelines being thrown at flailing SOEs. Only bailouts and government guarantees that were previously announced.

**Read more in Daily Maverick:**[No new money allocated to basket-case state-owned enterprises by Godongwana](https://www.dailymaverick.co.za/article/2024-02-21-budget-no-new-money-for-basket-case-state-owned-enterprises/)

#### **Climate Change**

The government has raised US$3.3-billion so far from Multilateral Development Banks and International Finance Institutions to support climate change, energy, and just transition objectives. **DM**