Treasury lowers borrowing requirement through reserve drawdown

By Paul Richardson

National Treasury lowers gross borrowing requirement through drawdown from the Gold and Foreign Exchange Contingency Reserve Account, according to Budget Review published in Cape Town on Wednesday.

  • Drawdown will be applied in three tranches of 100 billion rand in 2024-25 and 25 billion rand each in the subsequent two fiscal years
  • Borrowing requirement is lowered to 457.7 billion rand in 2024-25 fiscal year, compared with 559.6 billion rand estimate in November
  • Requirement for 2025-26 cut to 579 billion rand from 623.4 billion rand; estimate for 2026-27 falls to 428.5 billion rand from 478.2 billion rand
  • Domestic long-term loans seen at 328.1 billion rand in 2024-25, compared with November estimate of 419.1 billion rand; 422.2 billion rand in 2025-26, compared with previous forecast of 463.6 billion rand, and 303.2 billion rand in 2026-27 vs 349.1 billion rand
  • Domestic short-term loans seen at 33 billion rand in 2024-25 vs 47 billion rand previously, 47 billion rand in 2025-26 vs 52 billion rand, and 34 billion rand in 2026-27 vs 39 billion rand
  • Foreign loans little changed at 36.7 billion rand in 2024-25 and 82.2 billion rand in 2025-26, compared with 36.9 billion rand and 82.7 billion rand respectively in November; forecast for 2026-27 is 92.2 billion rand vs prior estimate of 92.8 billion rand
  • “Government will continue to explore financing instruments that offer concessional loan terms to support its developmental objectives, including implementation of the Just Energy Transition Investment Plan,” Treasury says. “In 2024-25, the equivalent of $2 billion will be raised from international institutions – and $9.5 billion over the next two years”
National Government Gross Borrowing Requirement2023-242024-252025-262026-27
Domestic short-term loans (net)88334734
Domestic long-term loans328.0328.1422.2303.2
Foreign loans45.236.782.292.2
Change in Cash/Other Balances92.159.927.6-0.9
Total Borrowing Requirement553.1457.7578.9428.5
Source: National Treasury    
  • Transfers to Eskom over 2023-24 and 2024-25 are 2 billion rand lower than projected in each year – at 76 billion rand and 64.2 billion rand respectively — “as a result of the entity’s failure to conclude disposal of the Eskom Finance Company, as stipulated in the debt-relief conditions”
  • Budget deficit forecast lower next three fiscal years compared with November estimates: 4.5% in 2024-25 vs 4.6%; 3.7% in 2025-26 vs 4.2%; 3.3% in 2026-27 vs 3.6%
  • Debt-service costs were revised upward by 15.7 billion rand in 2023-24 to 356.1 billion rand; costs will climb to 382.2 billion rand, or 5.1% of GDP, in 2024-25, 414.7 billion rand (5.2%) in 2025-26 and 440.2 billion rand (5.2%) in 2026-27.

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