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South African National Budget 2018/2019 – a brief review
The South African Minister of Finance, Malusi Gigaba, delivered his first National Budget on Wednesday, 21 February 2018. This was
one of the most widely anticipated National Budgets in recent years. In particular, ahead of the budget there was significant debate
about possible tax changes, including the increase in the VAT rate, as well as the need for government to control key expenditure
items such as salary payments, but also fund tertiary education and national health insurance. The demands on the Minister, however,
extended well beyond issues relating purely to revenue and expenditure. These included the urgency for government to start to reform
the management and financing of State Owned Enterprises (SOEs), the need to clarify key economic policies, the importance of lifting
business confidence as well as avoiding any further credit rating downgrades. A daunting set of demands for any Minister of Finance.
Although it is clear that government’s fiscal parameters have deteriorated substantially in recent years, leading to successive credit
rating downgrades, the Minister was able to present a budget that is significantly better than the Medium Term Budget Policy
Statement (MTBPS) issued in October 2017. Back in October 2017, the MTBPS reflected a shock deterioration in all of the
government’s key fiscal parameters, especially revenue collection, and government debt. This dramatically increased the chances that
South Africa’s credit rating could be cut to below investment grade by all of the rating agencies.
Fortunately, the latest set of budget parameters, together with recent political developments, greatly reduces the chances of further
credit downgrades in the short-term. Nevertheless, a significant amount of work still needs to be done to lift business and consumer
confidence, encourage private sector investment and sustainably raise economic growth. Government’s latest growth projection of just
over 2% in 2020 is hopelessly below the level South Africa requires to create employment, lift incomes meaningfully and reduce
inequality.
The 2018/2019 budget numbers
For the 2018/19 fiscal year the Minister of Finance announced that the budget balance should improve to -3.6% of GDP, down from
-4.3% of GDP in 2017/2018. This is slightly better than the deficit the Minister projected in the October 2017 Medium Term Budget
Policy Statement (MTBPS). The fiscal deficit is then expected to remain unchanged in 2019/2020 as a percentage of GDP, before
falling to -3.5% of GDP in 2020/21. It should be mentioned that in prior years the government had aimed to reduce the budget deficit to
below -3% of GDP, but clearly the sustained lack of economic growth coupled with subdued revenue collection has thwarted those
ambitions.
The government also intends to achieve a primary budget surplus (which is the budget deficit less interest costs) of 0.1% of GDP in
the current fiscal year. This would be a very welcome achievement, after recording a primary budget deficit of -0.7% of GDP in the
past fiscal year, and will go a long way towards convincing the public, investors and credit rating agencies that government is serious
about its intention to achieve a more disciplined financial framework.
Unfortunately, while the projected reduction in the budget deficit and improvement in the primary balance over the next three years
reflects an intention to adhere to fiscal discipline, South Africa’s National Treasury has developed a reputation in recent years for not
being able to achieve the targets articulated in the budget. Consequently, the emphasis within government’s economic policy will now
have to focus very heavily on raising economic growth on a sustainable basis. Without an acceleration in economic activity, the fiscal
authorities will once-again struggle to improve tax collection and meet their budget objectives. It is also clear that given the current
balance sheet constraints within central government as well as SOE sector, economic policy will have to increasingly promote the role
of the private sector in driving economic growth. We would hope this includes a greater reliance on Private-public partnerships.
The revenue side of the budget
In 2017/2018 tax revenue massively underperformed budget by an estimate R48.2 billion. While this is largely in-line with the revenue
shortfall the minister highlighted in the October 2017 MTBPS, it represents a huge miscalculation by National Treasury and meant that
government had to borrow substantially more than it had anticipated at the start of the fiscal year.
A breakdown of this revenue shortfall shows that the under-collection has been very broad-based and includes a dramatic R21 billion
shortfall in individual tax collection, a R14 billion under-collection of VAT and a R3.6 billion lapse in the collection of customs duties. In
contrast, company tax collection was in-line with budget, while the fuel levy exceeded budget.
Unfortunately, the latest revenue shortfall means that government has missed their revenue targets for four consecutive years, forcing
the authorities to look for additional sources of funding. Back in the 2017/2018 budget the emphasis was on increasing in the top
marginal tax rate for individuals from 41% to 45%, whereas in the latest budget the decision was taken to increase the VAT rate from
14% to 15%. The authorities hope that by increasing VAT by 1 percentage points they can raise an addition R22.9 billion. This
certainly seems ambitious in an economy that is projected to grow by a mere 1.5%.
Other significant tax changes announced in the budget included a sizeable increase in the fuel levy as well as the road accident fund,
a below inflation adjustment to the tax thresholds for individual taxes, an increase in estate duty, a hike in the normal range of excise
duties, a moderation in the medical aid tax credits and the inclusion of a range of taxes relating to the environment and health.
Government estimates that the increase in VAT together with the other tax changes we highlighted, will yield an additional R36 billion
in tax review.
Overall, the decision by government to raise the VAT rate was clearly not easy, especially considering the social and political risks
associated with an increase in any regressive tax under conditions of high unemployment. Nevertheless, the decision seems
appropriate given the need to broaden the revenue base and not simply rely on further increases in the top marginal tax rate.
Ultimately, though, the tough decision government has had to make on raising taxes in recent years reflects the consequences of a
lack of job creation.
The expenditure side of the budget
In 2018/2019 government expects to spend a total of R1.67 trillion, which is 7.3% more than it spent in 2017/2018. This ismodestly higher than the projected inflation rate of 5.3%, allowing government to largely adhere to its expenditure ceilingImportantly, spending on staff and salaries, which consumes 35% of all expenditure, is projected to grow at an average of 7.3%per annum over the next 3 years, highlighting government’s commitment to containing the rate of increase in consumptionspending. A key area of growth in government spending during 2018/2019 is education, especially post-school education and training. In total
government has allocated an additional R57 billion of new spending fee-free higher education and training over the next 3 years. This
reflects government earlier promises to help students that are currently struggling to afford higher education, especially tertiary
education.
There is also a sizeable increase in social spending, with the number of social grants recipients projected to rise to over 18 million in
2020. To some extent, the latest increase in spending on social grants reflects an attempt by government to offset the negative impact
of a higher VAT rate on poorer households. While this initiative is to be applauded, it also raises the base of social spending in South
Africa which will become increasingly problematic without an immediate and sustained rise in employment.
The government’s healthcare budget will also see a sizeable increase in expenditure over the next three year. Government has
indicated that they are continuing to implement National Health Insurance (NHI) and decided to support this initiative by reducing the
tax credits to medical scheme as a means of increasing the funding the future expansion of the NHI.
Lastly, and unfortunately, there is still not enough in the budget to directly promote job creation. South Africa’s unemployment rate
remains far too high by historical and international standards, and clearly contributes much of the social tension and anguish
experienced in South Africa on a daily basis. Increasing employment in South Africa has to be the number one
economic/political/social objective.
Debt servicing costs continue to rise at a very rapid pace
While South Africa’s public sector debt parameters are now projected to improve relative to the disastrous projection outlined in the
MTBPS, the total debt as well as the cost of servicing that debt is clearly on the rise. For example, back in 2009, government’s gross
debt totaled only 26% of GDP and is projected at 53% in 2018/2019. If left unchecked, government debt will quickly become a major
hindrance to achieving many vital policy objectives.
In addition, a key risk to South Africa’s ongoing fiscal stability is the increase in state debt cost. While the interest cost on state debt
remains manageable at just below 12% of total expenditure, it is now consistently the fastest growing component of government
expenditure. In fact, nominal growth in interest and rent on land is expected to average well over 10 per cent over the next three years.
Under these circumstances, a significant rise in bond yields, due to further credit rating downgrades, would put South Africa’s fiscal
position under increasing strain. Already the cost of debt exceeds the total budget allocation to public order and safety and is one of
the fastest rising components of state spending.
Conclusion
The 2018 National Budget was presented in an environment of intense scrutiny and high expectations. The dramatic revenue under-
collection and weak economic growth meant National Treasury had to make tough decisions. Either it had to decide to allow the
budget deficit to increase significantly further in 2018/2019 and thereby risk an almost certain ratings downgrade to below investment
grade by Moodys in March 2018, or it had to decide to do the unpopular thing and raise the VAT rate. Treasury obviously chose the
tax hike option, which has allowed them to reflect a clear intention to restore fiscal discipline, giving South Africa a better than 50%
chance of maintaining its investment credit rating by Moodys.
However, and very importantly, the trade-off for this policy choice is that the recent tax hikes (VAT and others) will undoubtedly hurt
the weak economic environment, potentially depressing the already subdued rate of economic expansion in key sectors of the
economy.
This means that government needs to urgently focus on removing the key factors constraining economic growth. These factors include
policy uncertainty, high levels of corruption in both the private and public sectors, poorly performing SOEs, a lack of fiscal discipline
and low levels of business confidence.
Some of these constraints might be relatively easy to resolve, such as scrapping the proposed mining charter, while others would
require a larger degree of policy innovation such as the extensive use of private-public partnerships – fortunately the use of private-
public partnerships, as well as the sale of non-strategic state assets, were highlighted as policy options in the budget. Clearly, some of
the constraints outlined above will prove more difficult to resolve than others, but as the long as government demonstrates a firm and
ongoing commitment to lifting economic growth while at the same time maintaining fiscal discipline, business confidence and
investment will follow.
Regards Kevin Lings
Chief Economist
World vs SA GDP, annual growth rate
-3
-2
-1
0
1
2
3
4
5
6
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
%y/y
World
South Africa
15
25
35
45
55
65
75
85
95
200
4
200
5
200
6
200
7
200
8
200
9
201
0
2011
201
2
201
3
201
4
201
5
201
6
201
7Index
South Africa business confidence (BER)
3
-20
-15
-10
-5
0
5
10
15
20
25
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017Index
SA consumer confidence (BER)
5 ECONOMIC
CHALLENGES
FACING THE
COUNTRY
1. Lift business confidence
2. Restore fiscal discipline
3. Reform State Owned Enterprises (SOEs)
4. Ensure clear & consistent transformation policies
5. Dramatically reduce corruption
3.2 3.1
4.3
2.6
0.5
2.4
4.2
2.7
3.72.9
4.65.3 5.6 5.4
3.2
-1.5
3.0 3.3
2.2 2.31.7
1.3
0.31.0
1.5 1.8 2.1
-2
-1
0
1
2
3
4
5
6
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
%y/y
SA GDP annual growth rate (government estimate)
Government forecast
8.2
10.79.0
5.7 4.8
-7.6
3.92.8 3.5
10.2
12.911.0
12.113.8
12.8
-6.7
-3.9
5.5
2.6
7.0
-3.9
3.73.3
0.31.7 2.3 1.9
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
%y/y
SA growth in fixed investment (government estimate)
Government forecast
Open Budget Index 2017
0 20 40 60 80 100
South AfricaNZ
SwedenNorwayMexico
USBrazil
UKFrance
ItalyRussia
GermanyPortugal
CzechSouth Korea
TurkeyChile
ThailandSpain
NamibiaArgentina
GhanaIndia
KenyaMalaysiaMorocco
NigeriaVietnam
ChinaBotswana
ZambiaSaudi
Index out of 100
SA Budget Deficit as % of GDP
-0.8
-2.5-1.9
-0.6
1.21.7
-1.1
-6.5
-4.3-3.6
-4.1-3.6 -3.7 -3.5
-4.3-3.6 -3.6 -3.5-3.7
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
'02/03
'03/04
'04/05
'05/06
'06/07
'07/08
'08/09
'09/10
'10/11
'11/12
'12/13
13/14
14/15
15/16
16/17
17/18
18/19
20/21
21/22
% Fiscal years
SA primary budget balance as % of GDP
-0.5
-0.3
0.0
-0.7
0.10.2
0.3
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
14/15
15/16
16/17
17/18
18/19
19/20
20/21% Fiscal years
Breakdown of SA tax revenue (2018/2019)
Excise duties
3.0%
Individuals
38.0%
Customs duties
4.0%
Other
5.0%
Companies
18.0%
Fuel levy
6.0%
VAT
26.0%
SA Budget Revenue Over-runs/under-collection
8.2 6.5 5.214.9 13.3
-5.1
20.9
41.2
29.5
13.4
-14.5
-66.4
16.624.8
-14.0 -11.6
-30.4
-48.2
-16.3
12.0
-75
-65
-55
-45
-35
-25
-15
-5
5
15
25
35
45
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18Rbn, relative to the original budget and not the MTBPS
Ind
ivid
ual ta
x
VA
T
Cu
sto
ms d
utie
s
Excis
e d
utie
s
Oth
er
Co
mp
an
ies
Taxes o
n p
rop
erty
Fu
el le
vy
-25.00
-22.00
-19.00
-16.00
-13.00
-10.00
-7.00
-4.00
-1.00
2.00
Rbn
SA tax revenue shortfall in 2017/2018 (-R48.2bn)
SA main tax proposals 2018/2019 (+R36 billion)
Additions
Rm
Subtractions
Rm
Personal income tax
Fiscal drag: revenue from not fully adjusting for inflation
Medical tax credit adjustment
Corporate tax
Special economic zones
Taxes on property
Estate duty increase
Indirect taxes
Increase in VAT
Increase in general fuel levy
Increase in excise duties
Increase in environmental taxes
Introduction of health promotion levy
GAIN ON TAX PROPOSALS
6 810
700
150
22 900
1 220
2 360
280
1 930
36 000
350
Global comparison of corporate tax rates
10
15
20
25
30
35U
K
Eur
ope
Asi
a
US
A
Net
herla
nds
OE
CD
Wor
ld
Chi
na
Sou
th A
mer
ica
Sou
th A
fric
a
Afr
ica
Oce
ania
%
Global comparison of VAT tax rates
0
5
10
15
20
25N
iger
ia
Tha
iland
Japa
n
Aus
tral
ia
Indo
nesi
a
Bos
twan
a
Sou
th A
fric
a
Nam
ibia
Ken
ya
Mex
ico
Zam
bia
Chi
na
Per
u
Tur
key
Chi
le
Ger
man
y
Fra
nce
UK
Spa
in
Italy
Por
tuga
l
Irel
and
Gre
ece
%
100
120
140
160
180
200
220
240
260
280
300
320
340
360
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Cents per litre
South Africa’s fuel levy
Since 2009 the average annual increase in the fuel levy has averaged 11.4%
This compares with an average inflation rate of 5.4%
Estimates of individual taxpayers contribution
Percentage of personal tax before tax
adjustments
Percentage of personal tax
after 2018/2019 tax changes
R0 to R70 000 0.0 0.0
R70 000 to R150 000 2.2 2.0
R150 000 to R250 000 6.7 6.6
R250 000 to R350 000 10.1 10.0
R350 000 to R500 000 14.5 14.4
R500 000 to R750 000 16.7 16.7
R750 000 to R1 000 000 11.4 11.5
R1 000 000 to R1 500 000 12.2 12.3
R1 500 000+ 26.3 26.6
SA growth in individual income tax
12.7 13.211.9
20.1
15.6
5.1
10.6 10.3 10.212.3
13.9
9.78.6
9.710.0
0
2
4
6
8
10
12
14
16
18
20
22
'04/0
5
'05/0
6
'06/0
7
'07/0
8
'08/0
9
'09/1
0
'10/1
1
'11/1
2
'12/1
3
13/1
4
14/1
5
15/1
6
16/1
7
17/1
8
18/1
9% Fiscal years
Inflation has averaged 5% over the period
21
SA budget revenue increases 2018/2019
16.4%
10.5%
10.1%
9.7%
9.1%
8.6%
7.3%
7.3%
6.9%
6.2%
6.0%
Value-Added Tax
TAX REVENUE
TOTAL REVENUE
Individuals
Specific Excise Duties
General Fuel Levy
Skills Development Levy
Customs Duty
Transfer Duties
Dividend Tax
Companies
Inflation
Customs Union payments by SA government
1.8 2.8 3.0 3.1 3.2 3.9 4.4 5.2 5.6 7.2 8.4 8.2 8.3 9.713.314.1
25.224.728.927.9
17.921.8
42.243.4
51.751.0
39.4
56.0
48.346.3
60.1
0
5
10
15
20
25
30
35
40
45
50
55
60
65
90/9
1
91/9
2
92/9
3
93/9
4
94/9
5
95/9
6
96/9
7
97/9
8
98/9
9
99/0
0
00/0
1
'01/0
2
'02/0
3
'03/0
4
'04/0
5
'05/0
6
'06/0
7
'07/0
8
'08/0
9
'09/1
0
'10/1
1
'11/1
2
'12/1
3
13/1
4
14/1
5
15/1
6
16/1
7
17/1
8
18/1
9
19/2
0
20/2
1Rbn
SA breakdown of expenditure 2018/2019
State Debt, 11.8
Defence, 3.1
Public Order and Safety, 9.5
Economic Affairs, 10.5
Environmental Protection, 0.5
Housing and Community, 9.4
Health, 13.1
Recreation and Culture, 0.8
Education, 22.5
Social Protection, 12.9
-2.8
2.6
3.1
5.0
6.8
7.0
8.1
8.5
10.4
12.3
-4 -2 0 2 4 6 8 10 12 14
Defence
Recreation and Culture
Environmental Protection
Public Order and Safety
Health
Total
Social Protection
Housing and Community
State Debt
Education
%y/y
SA budget expenditure increases in 2018/19
•Consolidated national and provincial expenditure
Number of people obtaining a social grant
2000 2 946 618 2012 15 199 000
2003 5 808 494 2013 15 857 000
2004 7 941 562 2014 15 765 000
2005 9 406 829 2015 15 928 000
2006 10 918 263 2016 16 970 000
2007 11 983 141 2017 17 237 000
2008 12 374 770 2018 17 517 000
2009 13 066 118 2019 17 853 000
2010 14 624 580 2020 18 146 000
2011 14 624 580
SA Social Grant Beneficiary Numbers
SA government gross loan debt as % of GDP
10
15
20
25
30
35
40
45
50
55
60
88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20
%
SA government debt outlook
41.1
43.7
46.6
49.4
50.7
52.352.9
52.4 52.2 51.951.3
50.5
49.2
40
45
50
55
60
65
12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21
21/22
22/23
23/24
24/25Rbn Fiscal years
2017/2018 Budget
February 2017
SA government debt outlook
41.1
43.7
46.6
49.4
50.7
52.352.9
52.4 52.2 51.951.3
50.5
49.2
50.7
54.2
57.0
58.2
59.760.8
61.662.4 62.8
63.3
40
45
50
55
60
65
12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21
21/22
22/23
23/24
24/25
25/26Rbn Fiscal years
2017/2018 Budget
February 2017
Revised estimates
October 2017
SA government debt outlook
41.1
43.7
46.6
49.4
50.7
52.352.9
52.4 52.2 51.951.3
50.5
49.2
50.7
54.2
57.058.2
59.760.8
61.662.4 62.8
63.3
50.7
53.3
55.1 55.356 56.2 56.2 56.1 55.7 55.3
40
45
50
55
60
65
12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21
21/22
22/23
23/24
24/25
25/26Rbn Fiscal years
2017/2018 Budget
February 2017
Revised estimates
October 2017
2018/2019 Budget
February 2018
SA government net domestic long-term bonds
-20
0
20
40
60
80
100
120
140
160
180
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21
Rbn Fiscal years
Government debt as % of GDP – 2017 (IMF data)
0
25
50
75
100
125
150
175
200
225
250
275R
ussi
a
Turk
ey
Em
ergi
ng E
urop
e
Aus
tralia
Chi
na
Em
ergi
ng E
cono
mie
s
Em
ergi
ng A
sia
Sou
th A
frica
Mex
ico
Latin
Am
eric
a
Ger
man
y
Indi
a
Irela
nd
Bra
zil
Eur
o ar
ea UK
Can
ada
Fran
ce
Spa
in
Adv
ance
d E
cono
mie
s
Uni
ted
Sta
tes
G7
Por
tuga
l
Italy
Gre
ece
Japa
n
%
SA government net foreign funding
-15
-10
-5
0
5
10
15
20
25
30
35
40
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
17/18
18/19
Rbn Fiscal years
Foreign holding of SA bond market
0
5
10
15
20
25
30
35
40
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016Percentage of market
SA debt servicing costs as % of total spending
5
7
9
11
13
15
17
19
21
23
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21
% Fiscal years
-10
-5
0
5
10
15
20
25
30
35
40
45
50
200
6
200
7
200
8
200
9
2010
201
1
201
2
201
3
201
4
201
5
201
6
201
7
% year-on-year, 4-quarter moving ave
35
Growth in fixed investment spending by State Owned Enterprises (SOEs)
SA government contingent liabilities
100
200
300
400
500
600
700
800
900
1000
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
17/18
18/19
19/20
20/21Rbn Fiscal years
Contingent liabilities average annual growth 16%
Other, 159.2
Eskom, 235.8
Independent power
producers, 116.9
SAA, 11.8
SANRAL, 28.4
Trans-Caledon
Tunnel, 18.8
Road Accident
Fund, 224.7
Government contingent liabilities 2017/2018
R billion
Sovereign credit ratings of South Africa
Rating Date Rating Date Rating Date
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
16 Jul 2009
11 Jan 2005 / 27 Sep 2012
29 Nov 2001/6 Nov 2014
30 May 1995/9 June 2017
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
1 Aug 2005
7 May 2003 / 12 Oct 2012
25 Feb 2000/13 June 2014
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
25 Aug 2005
2 May 2003/10 Jan 2013
27 June 2000/4 Dec 2015
Ba1
Ba2
Ba3
BB+
BB
BB-
20 Nov 1995 / 3 April 2017
3 Oct 1994
BB+
BB
BB-
19 May 1995 / 7 April 2017
22 Sept 1994
Moody’s Standard & Poor’s Fitch
Inve
stm
en
t
gra
de
Sp
ecu
lativ
e
gra
de
0
1
2
3
4
5
6
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Credit rating
South Africa’s credit rating by S&P
SA international credit rating
BB
BB+
BBB-
BBB
BBB+
A-
Investment grade cut-off
SA 10-year government bond yield
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
%, yield
Inflation target introduced in February 2000
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Rand per US Dollar
Rand exchange rand against US Dollar
Evaluating the SA national budget
Negative Positive
Budget objectives clearly stated No
Budget deficit contained Yes
Revenue :
Appropriate composition No
No ad hoc measures Yes
Efficiency of collection No
Spending:
Appropriately allocated Yes
Public sector salary increases contained Yes
Increases in public sector investment No
Positive impact on the economy:
Growth No
Inflation No
Encouraging private sector investment No
Help encourage job creation No
Provide poverty relief/welfare Yes
Encourage savings No
Encourage small business No
Innovation No