The National Treasury of South Africa says the country’s falling revenues and a recession have affected its ability to finance the public services that form the largest part of its budget.
The Treasury’s Director-General, Dondo Mogajane told a parliamentary committee on Tuesday in Cape Town that the challenges had placed tremendous stress on the economy.
“The contraction of our public finances is placing tremendous stress on us and our ability to finance public services and this threatens the affordability of planned expenditure,” Mogajane said.
South Africa’s economy slipped into recession in the second quarter for the first time in nearly a decade and faced political uncertainty that caused turmoil in its currency and financial markets over its finance minister.
Next week’s medium-term budget release would be closely watched for details of President Cyril Ramaphosa’s stimulus plan to pull the economy out of recession and avoid further lower ratings.