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 Requirement | 2023-24 | 2024-25 | 2025-26 | 2026-27 |
| Domestic short-term loans (net) | 88 | 33 | 47 | 34 |
| Domestic long-term loans | 328.0 | 328.1 | 422.2 | 303.2 |
| Foreign loans | 45.2 | 36.7 | 82.2 | 92.2 |
| Change in Cash/Other Balances | 92.1 | 59.9 | 27.6 | -0.9 |
| Total Borrowing Requirement | 553.1 | 457.7 | 578.9 | 428.5 |
| 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.
Read also:
- In full: Finance Minister Enoch Godongwana’s budget speech
- Rand surges and bond yields drop as Government taps Central Bank reserves to slash debt
- Highlights from Finance Minister Enoch Godongwana’s budget speech
© 2024 Bloomberg L.P.
