By the end of November, South Africa’s main budget balance had a deficit not far under R440 billion, new figures published on Wednesday show – an increase of 77% over the year-to-date deficit at the same time in 2019.
The monthly release from the national treasury, of actual revenue, expenditure, and borrowings, serves as a running check against annual budget projections.
At the moment, the shortfall between income and expenditure is expected to hit R707.8 billion by the end of the financial year.
By 30 November the state had spent R1.131 trillion, compared to R1.054 trillion by the same time last year, an increase of a little over 7%, the data release shows.
But after lockdowns and associated economic devastation year-to-date revenues had amounted to only R693 billion, down more than 14% compared to the roughly R800 billion that had been gathered by November 2019.
Voted appropriations, meanwhile, were up 8% to nearly R630 billion.
In June the government announced it would slash expenditure on, among other areas, school infrastructure, roads, trade incentives, libraries, prisons, universities, and spies, to pay for spending aimed at fending off the coronavirus and its consequences.
Even so, the budget deficit was expected to grow from 6.8% of GDP to 15.7% of GDP, with 21 cents out of every rand paid in tax expected to be spent on servicing debt.
South Africa had begun heading into a debt spiral, said Dondo Mogajane, Treasury’s director-general, in the budget statement at the time.
The government plans to massively cut spending in coming years, and hopes to borrow at lower interest rates, to keep the fiscal ship afloat.