SA government plans to utilize foreign reserves to settle debt, social welfare, others

South Africa’s government has stated that it will dig into its foreign reserves to try to lower its massive debts.

The unexpected action was revealed by Enoch Godongwana, the finance minister, during his budget statement in Cape Town.

South Africa’s current borrowings are at their highest level since 1947, with more money being spent on debt payment than on education and health.

Godongwana also announced they will invest more than R900 billion in infrastructure programmes.

In a bid to crack down on crime the government will hire 10,000 police officers this year.

Godongwana stated that the moves were aimed to decrease debt servicing expenses after withdrawing billions from the Gold and Foreign Contingency Reserve Accounts.

The government also said it will increase the old age grant by R100, the foster care grant by R50 and the child support grant by R20.

He added that they were working with social development to improve the R350 Social Relief of Distress grant.

“These improvements will be within the current fiscal framework. For the extension of the grant beyond March 2025, the social security policy reforms, together with the funding source, will be finalised.”

Godongwana also stated that they will introduce the National Health Insurance.

President Cyril Ramaphosa has stated that he will sign the NHI Bill into law, despite objections from political parties and other sectors.

Godongwana stressed that they will allocate funding for South Africa’s peacekeeping deployments in several nations.

The country currently deployed 2,900 soldiers in the Democratic Republic of Congo and 1,500 in Mozambique as part of the Southern African Development Community Mission.