Of all the tax collected in South Africa, 20% goes towards paying interest on the government’s debt which is now R5.2 trillion.
Of all the tax collected in South Africa, the government allocates 20% towards interest payments on its R5.2 trillion debt. As debt-servicing costs rise, there is less money available for crucial sectors like education and healthcare.Many experts are concerned about the country’s deteriorating finances over the past 10 years. Significant increases in government spending have also not resulted in meaningful economic growth.
Essentially, the government has been spending more money than it collects through taxes and has been funding this expenditure by increasing debt, according toA deficit is not necessarily negative. However, but consistent deficits can lead to a country entering a debt spiral where the government incurs new debt to manage old or existing debt.According to Izak Odendaal, an investment strategist at Old Mutual, the damage caused during Jacob Zuma’s presidency is much worse than many people realise.
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