The Medium Term Budget Policy Statement (MTBPS), tabled by the Minister of Finance on October 26, is delivered in the context of a complex economic and political international backdrop and a domestic energy and logistics crisis, which is limiting growth over the next 12 to 18 months, and the ANC’s elective conference in December 2022. South Africa’s fiscal position remains relatively sound, having avoided a fiscal cliff in 2021, as commodity prices surged.  However, a high country-risk premium embedded in SAGBs, compared with other emerging markets, reflects continued uncertainty about the growth/expenditure dynamics over the MTEF (Medium Term Economic Framework) period.

The MTBPS is expected to address several key long-term outstanding issues. But the baseline MTEF forecast is likely to provide concrete numbers only when the Budget Review is presented in February 2023.

• More SOCs to receive cash injections
• Policy decisions on e-tolls and permanent income transfer
• Revenue overrun of R110bn expected
• Reduction in ILB/FIX/FRN auction sizes expected but opening cash balance for FY23/24 could be higher
• Eskom debt transfer plan in principle
• Larger primary surplus is expected in FY23/24

The gross debt-to-GDP ratio could temporarily decline below 70% of GDP in FY22/23 but stabilise at 75% of GDP over the MTEF period (including guaranteed Eskom debt to the value of R200bn (2.9% of GDP)). 

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