New data reveals what SA’s government really spends on
National Treasury reported R5.3 trillion in gross loan debt in 2023/24. Servicing this debt cost R356 billion, or 15% of total spending.
Image: Canva / IOL Graphics
If you want to know what matters to the government, look at its budget.
A closer look at general public services shows public debt transactions as the main cost driver.
National Treasury reported R5.3 trillion in gross loan debt in 2023/24. Servicing this debt cost R356 billion, or 15% of total spending.
- This exceeded the entire health budget of R276 billion.
- It was almost equal to the R365 billion spent on social protection.
New data from audited financial statements for 705 institutions sets out South Africa’s fiscal priorities.
General government spent R2.4 trillion in 2023/24, according to Statistics South Africa’s latest Financial Statistics of Consolidated General Government release.
- General public services took the biggest slice at 25%.
- Education followed at 20%.
- Social protection accounted for 15%.
- Health took 12%.
Public debt payments were also the biggest contributor to rising expenditure in 2023/24.
Government spending increased by a net R139.3 billion year-on-year.
National government’s general public services bill rose R48 billion, largely because public debt transactions jumped by R47.7 billion.
Government spent most of its money on debt last year.
Image: Statistics South Africa
Extra-budgetary funds spent an additional R23.4 billion on economic affairs, mainly in rail and road transport.
Local municipalities added R19.7 billion to public services.
The national government also increased spending on old age, family and children, and disability grants, lifting social protection by R17.3 billion.
The largest decrease was in economic affairs, down R39 billion.
Statistics South Africa attributed this to the base effect from the once-off capital transfer to Eskom the year before.
Public debt’s share of total spending rose from 13.7% in 2022/23 to 14.9% in 2023/24.
Finance Minister Enoch Godongwana said government will shift more resources toward infrastructure.
“We will ensure that our goal of public sector investment in infrastructure exceeds the R1 trillion mark over the next three years,” said Godongwana.
Michelle Green, credit analyst and chairman of the ESG Committee at Prescient Investment Management, said if this “bold ambition” is realised, it “will translate into a series of transformative projects”.
Green said these will be in energy, water, student housing, internet infrastructure and logistics hubs.
Godongwana told Parliament that government will rely on public:private partnerships.
“We are leveraging public resources to mobilise private finance and expertise at scale to strengthen service delivery, improve spending effectiveness and drive higher economic growth,” said Godongwana.
Yet, “the trick will be creating an enabling environment for investors to participate,” said Green.
A new McKinsey report, The infrastructure moment, forecasts potential investment of R1.822 trillion by 2040.
IOL BUSINESS