Don’t have your Nedbank ID yet?
Nedbank ID single sign-on gives you full digital access to Nedbank’s banking and lifestyle products and services on the Money app or Online Banking.
Log in
Log in to Online Banking or another one of our secured services.
Bank your way with low fees and extra benefits.
Enjoy 55 days’ interest free credit and other benefits.
Affordable loans and interest rates from R2k to R300k.
Up to 100% property loan and 105% for first-time buyers.
Debt management support when you need it the most.
Cover for you and your family in the event of death.
Car, building, house contents, valuables and more.
Bond, credit card, overdraft, loan and car repayments.
Guaranteed income and growth plans for future income.
Achieve your financial goals with expert planning.
We’ll help manage your assets, debts and estate planning.
Accounts
-
Everyday banking Simpler more affordable
-
Kids accounts For children under 16
-
Youth banking For 16 to 26 year olds
-
Seniors accounts For 55 years and older
-
Private Clients Personalised banking services
-
Private Wealth The globally integrated account
-
Digital wallet Your phone is your bank account
Credit cards
Digital banking
Switch to Nedbank
Fraud awareness
Forex
Greenbacks
Accounts
-
On demand Money available at any time
-
In 24 hours Cash in your hand the next day
-
In 32 days Funds ready within a month
-
End of term Investments left until maturity
Investment services
Share trading
Personal loans
Home loans
Overdrafts
Vehicle finance
Solar finance
Debt assistance
Funeral cover
Short term insurance
Credit Life
Travel insurance
Business cover
Secure investments
Financial planning
Estate, wills & trust services
Nedbank Private Wealth
Speak to a financial adviser
Blog
Talk to us
Find us
- Login & Register
- Online Banking
- Online Share Trading
- NetBank Business
- NedFleet
- Nedbank Greenbacks
- Nedgroup Investments
- Nedbank ID
- Bank
- Accounts
- Credit cards
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Greenbacks
- Explore Bank
- Accounts
- Everyday banking
- Kids accounts
- Youth banking
- Seniors accounts
- Private Clients
- Private Wealth
- Digital wallet
- See all accounts
- Premium banking
- Get help choosing
- Goal saving
- Family Banking
- Refugees and asylum seekers
- FAQ
- How-to guides
- Discontinued accounts
- Everyday banking
- MiGoals Premium
- MiGoals Plus
- MiGoals
- Kids accounts
- MiGoals4Kids
- Youth banking
- MiGoals Premium
- MiGoals
- MiGoals Plus
- Seniors accounts
- MiGoals Premium Senior
- MiGoals Plus
- Private Clients
- Pay-as-you-use
- Young Professionals
- Private Bundle and Private One
- Private Wealth
- Private Wealth Bundle
- Digital wallet
- MobiMoney
- American Express
- Amex Gold
- Amex Platinum
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Greenbacks
- Exclusive discounts
- FAQ
- How-to guides
- Save & Invest
- Accounts
- Investment services
- Share trading
- Explore Save & Invest
- In 24 hours
- JustInvest
- PlatinumInvest
- Tax-free Savings
- MoneyTrader
- EasyAccess Fixed Deposit
- PrimeSelect
- In 32 days
- Electronic 32Day Notice
- 32Day Notice
- End of term
- Tax-free Fixed Deposit
- Electronic Fixed Deposit
- Electronic Optimum Plus
- Platinum Fixed Deposit
- Fixed Deposit
- OptimumPlus
- Investment services
- Share trading
- Borrow
- Personal loans
- Home loans
- Student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Explore Borrow
- Personal loans
- Loan consolidation
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Explore loans
- FAQ
- How to guides
- Loan consolidation
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Home loans
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R32,000 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Explore home loans
- FAQ
- How to guides
- Track application
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R32,000 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Student loans
- Explore student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Debt assistance
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- Consolidate all your debts into a simple loan | Nedbank
- Short-term payment relief | Nedbank
- Take charge and restructure your finances | Nedbank
- Assisted-sales solutions for homes and vehicles | Nedbank
- Flexible payment plans for loans and credit | Nedbank
- Understanding how repo rate works | Nedbank
- Insure
- Life cover
- Funeral cover
- Short term insurance
- Credit Life
- Travel insurance
- Business cover
- Secure investments
- Explore Insure
- Life cover
- Get a call back
- Explore MyCover life
- Funeral cover
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Get a call back
- Explore MyCover Funeral
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Valuables insurance
- Get a call back
- Explore MyCover short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Valuables insurance
- Credit Life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Get a call back
- Explore credit life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Travel insurance
- Business cover
- Secure investments
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Get a call back
- Explore MyCover Funeral
- Guaranteed Growth Income Plan
- Guaranteed Growth Plan
- Plan
- Financial planning
- Estate, wills & trust services
- Nedbank Private Wealth
- Speak to a financial adviser
- Explore Plan
- Financial planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Estate, wills & trust services
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Nedbank Private Wealth
- Speak to a financial adviser
- Learn
- Blog
- Explore Learn
- Blog
- Contact us
- Talk to us
- Find us
- Explore Contact us
- Talk to us
- Find us
Budget 2024: Economic outlook and implications
Budget 2024: Economic outlook and implications
Staff writer
Posted 18/03/2024 5 mins
How has Treasury dealt with our economic outlook in the 2024 National Budget?
South Africa was on tenterhooks before the announcement of the 2024 National Budget. The country is in a major economic slowdown, made more difficult by continued load-shedding and the decline in our national logistics networks. Finance Minister Enoch Godongwana had to balance the need to boost economic growth and reduce unemployment with the equally important need to service the country’s growing national debt. So, what is government’s budget strategy?
Managing national debt: A closer look
Minister Godongwana announced a worsening of the official estimate of the budget deficit from a year ago, from 4% to 4.9% of GDP. This means that debt service costs will increase by an additional R15.7 billion to R356 billion and absorb more than 20% of national tax collections, which amounts to more than the respective budgets for social protection, health, and peace and security. Debt will now peak at 75.3% of GDP in 2025/26. The tax revenue shortfall in 2023/24 is R56.1 billion, mostly due to lower corporate tax collection, especially the steep fall in mining taxes, with miners hit hard by load-shedding.
Over the coming year, personal tax collections are expected to rise by 9.4% a year, while company tax payments will increase by 5.1%. Value-added tax collections are projected to increase by 6.6%, exceeding National Treasury’s inflation forecast of less than 5%.
The big news for borrowing costs is the use of valuation gains in the Gold and Foreign Exchange Contingency Reserve Account (GFECRA) to reduce the public sector gross borrowing requirement (PSGBR). Over the medium-term framework, the PSGBR averages 6.25% of GDP, easing to 5.1% in 2026/27 from 7.8% in 2023/24. Between 2024/25 and 2026/27, Treasury will tap R150 billion from the GFECRA. Legislation governing the use of valuation gains and losses in the Contingency Reserve Account is still to be formalised. Tapping the GFECRA is meant to reduce government’s borrowing, which averages more than R1 billion each day.
Taxation updates
Godongwana aims to boost tax revenue by R15 billion in 2024, even though he has not raised income tax or other tax rates. The South African Revenue Service (SARS) expects to gain the extra revenue from income tax on salaries that have been increased by employers to keep pace with inflation, which is expected to run at 4.9% this year. The 2024 Budget does not adjust tax brackets for inflation, so pay increases will likely push many taxpayers into a higher tax bracket, producing more income tax revenue. Similarly, tax rebates and medical aid scheme contributions won’t be adjusted for inflation.
The National Health Insurance scheme
The National Health Insurance (NHI) scheme dominated the news in the run-up to the Budget announcement. While not removing the NHI from the national fiscal picture, Godongwana instead allocated R1.4 billion to developing the rollout of the policy as a ‘demonstration of commitment’ to it.
Excise duties for alcohol will increase by up to 7%
The initial allocation, part of an R848 billion total allocation to the health portfolio, is dedicated to factors such as building a national health information system and digital patient records, upgrading facilities and accrediting hospitals, as well as developing reference and payment systems for the scheme.
Addressing employment concerns
While short on effective funding to generate new and additional employment, especially in the private sector and particularly in entrepreneurial and small-business contexts, the 2024 Budget indicates that government will at least attempt to constrain spending on the public sector wage bill. It has allocated R251 billion in the coming financial year to cover public sector wage increases. This will predominantly be used to fund the salaries of essential public-sector workers such as teachers, health workers and the police. No money has been allocated to fund wage increases in other public sector departments.
Eskom and Transnet challenges
The elephant in the room of this Budget was how Treasury would deal with the constraints on the economy imposed by the debt and inefficiencies of the 2 largest SOEs, Eskom and Transnet. The Budget stipulates that allocations to Eskom through government’s debt relief programme will be cut by R4 billion over 2 years, citing the power utility’s failure to dispose of its finance company, which was a condition of the previous bailout.
Eskom’s debt, apart from the massive knock-on economic damage caused by 15 years of rolling blackouts, prevents it from properly investing in its ageing coal-fired plants, further cementing our power provision woes. Eskom alone has received more than R300 billion in bailouts since 2008. Treasury is now seemingly becoming more stringent about the utility’s recovery plan, insisting that private sector collaboration and alternative power generation are prioritised.
Transnet was recently granted a R47 billion bailout to enable the state ports and rail company to service its debt and cover its operational costs. However, government has approved Transnet’s use of only R14 billion of the package from December 2023 to March 2024 to pay off maturing debt, to ensure that the SOE sticks to its recovery plan.
The plan includes accelerating capital spending on operational equipment such as port cranes, marine vessels and rail rolling stock. The rail recovery focuses on allocating capital for the rehabilitation of rail infrastructure and returning older locomotives to service. The Budget makes no further allocations to Transnet, which has inflicted a huge blow to the economy in recent years, endangering jobs and damaging productivity, especially in the mining industry.
‘Sin’ taxes
‘Sin’ taxes and customs duties are the fourth-biggest contributors to the tax revenue base and will generate around R142 billion in 2024/25. Excise duties for alcohol will increase by up to 7%, by up to 5% for cigarettes, and by up to 8% for pipe tobacco and cigars.
See Nedbank’s full breakdown and economic analysis of the 2024 Budget.