The Finance Minister, Enoch Godongwana, has dismissed claims that the government has run out of money, clarifying that the revenue collection has been lower than projected earlier this year. Despite the challenges, the government is committed to managing its finances prudently to ensure the delivery of essential services.
In recent weeks, the government has faced criticism from political parties and unions regarding proposed cost-cutting measures by the National Treasury, with concerns raised about the potential impact on service delivery. However, Godongwana emphasized that the government aims to manage finances in a sustainable manner, taking into account unforeseen economic and financial conditions.
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During a parliamentary session, Godongwana responded to a written question from EFF MP Mzwanele Manyi, stating, ‘To be clear, the government has not run out of money.’ He further highlighted that the government regularly publishes the ‘Statement of the National Government’s Revenue, Expenditure, and Borrowing’ on the National Treasury website, providing detailed information on revenue collections, expenditure, and borrowing.
Godongwana acknowledged that revenue collections for the first four months of the current fiscal year have fallen below expectations, primarily due to under-collections in corporate income tax and higher VAT refunds. Consequently, the main budget deficit for this period is higher than anticipated.
Furthermore, the Finance Minister noted that the economic and revenue outlook has deteriorated compared to the 2023 Budget, and tighter financial conditions have constrained the government’s borrowing program, resulting in higher borrowing costs. Despite these challenges, the government remains committed to prudent fiscal management and addressing the current economic difficulties to ensure the financial stability of the nation.
Looking ahead, Godongwana is expected to provide more detailed insights into the state of the economy during his upcoming Medium Term Budget Policy Statement in November. However, economists have cautioned that if the economy fails to recover, it could pose further challenges for the country.
