TRAILBLAZER FINANCIAL FITNESS BY KOKETSO JESSIE TAYLOR MAMABOLO
Public Debt This is how it affects your bank balance
S
outh Africa spends more than R300billion every year paying off public debt. While it might seem that this expenditure has little impact on the day-to-day life of ordinary South Africans, public debt can have far-reaching consequences.
THE GROWING CONCERN OF DEBT Public or national debt is money borrowed by a government to bridge the gap between the money it generates and its spending. It’s the same principle as taking out a personal loan, but to supply the funds needed to cover the country’s budget deficits. According to Finance Minister Enoch Godongwana, the government will spend R302-billion in 2022/2023 on debt service costs. This as government debt reached
R4.3-trillion and was projected to rise 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 … 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,” Minister Godongwana says.
66 | Public Sector Leaders | April 2022
This is the first time since 2015 that we are reducing the borrowing requirement, using some of the extra revenue we have collected. The borrowing requirement decreases by R135.8-billion this year and a total of R131.5-billion over the next two years
