Budget AnalysisInsightsMacroeconomic updateSouth Africa

24 February 2023

South Africa : Eskom Relief Pushes Debt Stabilization further

In brief

  • Finance Minister Enock Godongwana presented the FY24 budget on Wednesday 22 February 2023


  • Against the 2022 Medium Term Budget Policy Statement (MTBPS) projections, 2023 growth was revised lower from 1.60% to 0.9%, majorly on the drag of protracted load-shedding. Nonetheless, the National Treasury is more optimistic about the growth prospects compared to the South African Reserve Bank, SARB (2023: 0.3%)


  • Debt relief totaling ZAR 254.0bn to Eskom was announced in the budget, comprising of ZAR 184.0bn in loan advances between FY24 – FY26 and ZAR 70.0bn in direct loan takeover in FY26.


  • Although the debt relief has resulted in a higher projected positive primary balance from FY24 through FY26, the downside is that debt stabilization is now expected in FY26 (73.6% of GDP).


  • Eskom is expected to meet strict conditions but there is less clarity around settlement of the municipalities’ arrears (c. ZAR 56.3bn) owed to the state utility company.


  • The FY24 budget did not pencil any positive tax adjustments but offered tax relief totaling ZAR 13.0bn. With an expectation of revenue overrun, this implies neutral tax adjustments in FY24.


  • Details were light on the status of the three SOEs that received Special Appropriations in FY23, although there is proposed funding to South African Airways and South African Post Office in FY24.

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