2015 Budget: Too little, too late for South Africa's public debt

The 2015 South African budget proposes austerity measures, including progressive tax structures and increased sin taxes, to combat a debt-to-GDP ratio that rose from 26% in 2009 to 43.9% by 2014. The author argues that these measures may be insufficient due to sluggish growth, rising interest payments that crowd out infrastructure and human capital spending, and potential budget drains from state-owned enterprises and public-sector wage disputes. The document concludes that the Treasury's target to stabilise debt at 43.7% by 2017/2018 is overly ambitious given the required primary surplus.

• South Africa's public debt increased significantly following the global financial crisis, with the debt-to-GDP ratio rising from 26% in 2009 to 43.9% by 2014.
• Rising interest payments on public debt have become the fastest-growing government expenditure item, increasing by nearly 70% since 2009 and displacing spending on long-term growth drivers like human capital and infrastructure.
• The 2015 budget's goal to stabilise the debt-to-GDP ratio at 43.7% by 2017/2018 is considered overly ambitious because the necessary primary surplus exceeds the budgeted balance, even assuming moderate interest rates and Treasury growth forecasts.
• Several risks threaten the budget's consolidation targets, including demands from organised labour for a 15% wage increase (compared to the budgeted 6.6%), the continued fiscal drain from state-owned enterprises such as Eskom, SAA, and the Post Office, and the potential for wealthy taxpayers to use loopholes to avoid progressive taxes.
• Credit rating agencies have expressed skepticism regarding South Africa's ability to meet consolidation goals, with Standard & Poor’s having downgraded the rating to BBB- in 2014 and Fitch indicating a possible further downgrade.

APA

South African Institute of International Affairs (2015). 2015 Budget: Too little, too late for South Africa's public debt. https://saiia.org.za/research/2015-budget-too-little-too-late-for-south-africas-public-debt/

Chicago

South African Institute of International Affairs. 2015 Budget: Too little, too late for South Africa's public debt. 2015. https://saiia.org.za/research/2015-budget-too-little-too-late-for-south-africas-public-debt/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=2015 Budget: Too little, too late for South Africa's public debt |date=18 March 2015 |url=https://saiia.org.za/research/2015-budget-too-little-too-late-for-south-africas-public-debt/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs20152015, author = {{South African Institute of International Affairs}}, title = {{2015 Budget: Too little, too late for South Africa's public debt}}, institution = {South African Institute of International Affairs}, year = {2015}, month = mar, url = {https://saiia.org.za/research/2015-budget-too-little-too-late-for-south-africas-public-debt/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }