South Africa Budget 2022: When the economy’s bottom falls out

President Cyril Ramaphosa’s State of the Nation Address (Sona) again contained some positive signs of a change in policy direction. The provision of some timelines is another source of encouragement. We have heard the right noises before, only to be disappointed come implementation time.

What you will learn:

• Will this time be different? The focus now shifts to Finance Minister Enoch Godongwana who will deliver his 2022 Budget Speech on February 23, with little fiscal manoeuvring space and more pressure on the fiscus.
• The current social relief of distress (SRD) grant has been extended until March 2023. Given South Africa’s fiscal constraints, this was probably the best outcome as more consultation is needed before locking in a permanent expenditure of this magnitude.
• The implementation of a basic income grant (BIG) most likely would have led to an increase from the current R350 per month. That said, from a political viewpoint it will become increasingly difficult to withdraw this support in the future and it will probably become a permanent outlay.