The 2021 July unrest, which resulted in the deaths of more than 350 people, eroded the economic growth recorded in the first half of 2021, said Finance Minister Enoch Godogwana during his maiden Budget speech in parliament on Wednesday.
The violence that engulfed Gauteng and KwaZulu-Natal saw economic losses running into over R50-billion. Godongwana further said the re-emergence of load-shedding, restrictions to deal with the third wave of Covid-19, and the strike in the manufacturing sector also slowed down economic recovery.
Said Godongwana: “Our economic recovery has been uneven and risks remain high. We must proceed with caution. In the 2021 MTBPS [medium-term budget policy statement] we committed ourselves to charting a course towards growth and fiscal sustainability.
“This budget reasserts this commitment. It narrows the budget deficit and stabilises debt. It also extends income and employment support to the most vulnerable, addresses service delivery shortcomings and provides tax relief.”
However, the finance minister said interventions would not replace the structural changes the economy needed, stressing that “difficult and necessary trade-offs” were needed.
Tax collections since the MTBPS have been much stronger than expected. Tax revenue for 2021/22 is projected to be R1.55-trillion, which is R62-billion higher than government’s projections from four months ago, and R182-billion higher than estimates from last year’s Budget.
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