"South Africa achieves first primary budget surplus in 15 years"

" South Africa achieves first primary budget surplus in 15 years \r\n\r\nSouth Africa achieved its first primary budget surplus in 15 years as it took a stern approach to funding state-owned companies that have drained government finances.\r\n\r\nAfrica\u2019s most-industrialized economy posted a primary surplus \u2014 when revenue exceeds non-interest expenditure \u2014 of 31.6 billion rand ($1.7 billion) or 0.4% of gross domestic product in the year through March 2024, data in the South African Reserve Bank\u2019s Quarterly Bulletin published on Thursday showed. That matched the National Treasury\u2019s February forecast.\r\n\r\n\u201cThe decline in non\u2010interest expenditure was driven by lower voted expenditure, largely owing to the sharp decline in payments for financial assets, reflecting government\u2019s limited recapitalization of state-owned companies,\u201d the central bank said.\r\n\r\nThe data shows that Finance Minister Enoch Godongwana held a firm line on funding to debt-stricken state companies like ports and railways operator Transnet SOC Ltd., providing relief only if they meet strict conditions including implementing recovery plans and selling non-core assets. In his February budget, he provided no new bailouts to state firms.\r\n\r\nThe minister also reduced state power utility Eskom Holdings SOC Ltd.\u2019s debt-relief funds, after it failed to meet conditions attached to a 254 billion-rand package it was granted last year that the company has been accessing in tranches.\r\n\r\nThe data will be welcomed by investors who\u2019ve shunned South African assets because of its high debt levels. The country\u2019s debt-to-gross domestic product ratio of 74.1% is well above the emerging-market average of 58.9%, as is the nation\u2019s interest-to-GDP ratio.\r\n\r\nOne in every five rand of South African revenue goes to debt-service costs, which now absorb a larger share of the budget than basic education, social protection or health, the Treasury said in its February budget.\r\n\r\nPlans by the Treasury to draw down on the nation\u2019s Gold and Foreign Exchange Contingency Reserve Account and introduce a new binding fiscal anchor should moderate government debt. The Treasury expects it to stabilize at 75.3% of GDP in 2025-26.\r\n\r\nThe primary budget balance has been South Africa\u2019s main fiscal anchor since 2021."

"South Africa achieves first primary budget surplus in 15 years"

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