The National Treasury of South Africa has unveiled its ambitious 2024 Budget Review, setting out a careful balancing act between supporting national development and achieving crucial fiscal sustainability. After more than a decade of low growth, the budget outlines a policy stance designed to support higher public and private investment while stabilising debt and reducing overall fiscal risks.

If you thought the national budget was a snooze-fest, think again. This year’s plan is packed with significant reforms that aim to tackle the country’s deepest economic pains—from infrastructure failures to mounting debt—all while ensuring the salaries of critical public servants are protected.

The Debt Dilemma: Using Hidden Billions to Escape the Fiscal Chokehold

South Africa faces difficult fiscal choices following a decade of slow economic expansion. A central objective of the 2024 Budget is to stabilise public debt. Government debt is high and rising, draining taxpayer resources needed for investment and service delivery.

Here’s the stunning reality: Debt-service costs now consume one of every five rands of government revenue and absorb a larger share of the budget than vital functions like basic education, social protection, or health. This rapid growth in debt-service costs is choking the economy and public finances.

However, the government is staying the course to stabilise debt and narrow the budget deficit. For the first time since 2008/09, the government is set to achieve a primary budget surplus. Gross loan debt is expected to stabilise at 75.3 per cent of GDP in 2025/26.

The GFECRA Game Changer

To further mitigate fiscal risks and reduce borrowing, the government has decided to tap into the valuation gains held in the Gold and Foreign Exchange Contingency Reserve Account (GFECRA). This account, held at the Reserve Bank, has grown to over R500 billion, largely due to significant rand depreciation over time.

Under a proposed settlement, the government will draw down R150 billion of the GFECRA balance between 2024/25 and 2026/27. This massive infusion of funds will be used strictly to reduce government borrowing, resulting in a projected decline in debt-service costs by R30.2 billion over the medium-term expenditure framework (MTEF) period. This distribution must be transparent, governed by a formal framework, and used solely to reduce borrowing.

Powering the Future: A R1 Trillion Infrastructure Boost

Infrastructure is being positioned as the “flywheel of our economy,” and the government is aiming to shift spending composition from consumption towards investment.

The big headline: Government is committed to ensuring that public sector investment in infrastructure exceeds the R1 trillion mark over the next three years. Total planned infrastructure investment over this period amounts to R943.8 billion, with significant contributions from state-owned companies, public entities, municipalities, and provincial/ national government.

Capital payments are now the fastest-growing expenditure item, increasing by 7.5 per cent over the medium term.

Key reforms are focused on removing binding constraints in energy, freight, water, and telecommunications:

1. Private Power Grid Revolution: To accelerate energy security, the government will launch a R15 billion infrastructure bond soon to raise dedicated financing. Furthermore, a new Credit Guarantee Vehicle will be capitalised with R2 billion to facilitate private investment in high-voltage transmission expansion. This move “heralds a new era in PPPs,” enabling private investors to participate directly in transmission infrastructure, which is a crucial step for connecting renewable energy capacity.

2. Logistics Lifelines: Progress in logistics reforms is gaining speed, with eleven private train operators now having slots on 41 routes. Following interest in freight logistics, the Department of Transport plans to issue the first rail corridor request for proposal (RFP) by December 2025.

3. Institutional Overhaul: To streamline investment, amendments to Public-Private Partnership (PPP) regulations took effect on 1 June 2025, simplifying approvals for smaller projects and unlocking potential across all spheres of government. The Budget Facility for Infrastructure (BFI), which appraises large-scale projects, is now reconfigured to run four bid windows annually instead of just one. A new Infrastructure Finance and Implementation Support Agency will also be operational by March 2026 to coordinate planning, centralise financing functions, and crowd in private capital.

Protecting the Social Wage and Your Tax Bill

The government is committed to maintaining social protection while navigating fiscal consolidation. The 2024 Budget allocates six of every 10 rands to the social wage. On average, 60.2 per cent of consolidated non-interest spending will continue to be directed towards the social wage, covering health, education, social protection, community development, and employment programmes.

Over the medium term, there is a proposed additional spending of R57.6 billion, which is intended to ensure that the salaries of public servants, including teachers, nurses, and doctors, are catered for. Spending on social transfers is set to increase from R283.4 billion in 2023/24 to R331.5 billion in 2026/27.

What this means for Taxpayers: R15 Billion in Revenue

To support debt stabilisation and alleviate immediate fiscal pressure, the 2024 Budget includes tax proposals aiming to raise R15 billion in revenue in 2024/25.

The measures primarily affect personal income taxes through no adjustment of the tax brackets and rebates for inflation. Additionally, specific excise duties on alcohol and tobacco products will see an increase. Notably, there will be no increase in the fuel levy.

The forecast shows a moderate economic improvement. GDP growth is projected to increase from an estimated 0.6 per cent in 2023 to average 1.6 per cent between 2024 and 2026. This modest recovery, coupled with structural reforms, is crucial for lifting the country’s growth rate.

The 2024 Budget sends a clear message: the focus is on growth, stability, and deep, lasting reform.