You can also listen to this podcast on iono.fm here. ADVERTISEMENT CONTINUE READING BELOW JIMMY MOYAHA: Bloomberg reported something today, something that we in part expected, I suppose. We had previously been warned or given an insight that this is where we were going to land up. We were expecting to reach a budget surplus for the first time in 15 years – and we actually got there.Good evening, Johann. Lovely to speak to you again.
JIMMY MOYAHA: I hate that you say ‘non-interest expenditure’ – every time you say that the only thing that comes up in my head is the R360-plus billion of interest expenditure that we do pay, which isn’t included in this number. That means that there’s still a long way to go. There’s still a lot we need to deal with from that perspective, but I suppose baby steps forward. Take the positives as they come.
JIMMY MOYAHA: Johann, how much of this primary surplus that we achieved came from the decision that was taken to pay down some of the debt from that GFCRA that we didn’t know existed until the budget speech of 2024? How much of that impacted this primary surplus? Or just none of that? But Jimmy, the biggest issue is the lack of economic growth. If we get the economy on a slightly better economic growth path, it will mean so much more income in terms of tax receipts, because the stronger the economy, the stronger the growth in the economy, the stronger the growth in tax receipts – and it’ll make it so much easier to get the budget under better control and thus reduce that debt-to-GDP ratio more sustainably.
Of course, that ratio on its own, had the economy been growing at around 3% to 5%, wouldn’t have been the big risk that it is when the economy is growing at virtually nothing, or less than 1%. So that’s why it’s such a significant issue for foreign investors and for rating agencies.