South Africa’s financial position has deteriorated significantly since February this year.
Moneyweb recalculated the amounts Finance Minister Tito Mboweni disclosed in the Supplementary Budget on Wednesday, to represent the country’s financial position as a simple monthly household scenario.
Mboweni’s budget contains many references to trillions, billions and millions and it is not easy to comprehend the actual situation. A monthly version is a lot easier to digest. The reworked monthly budget appears in the table below:
|Original 2021 budget||Supplementary budget|
|Income||R116 500||R91 625|
|Expenses||R147 167||R150 767|
|Non-interest expenditure||R128 058||R131 058|
|Debt service costs||R19 108||R19 700|
|Shortfall||-R30 667||-R59 142|
|Debt owed||R3 562 000||R3 970 000|
The household budget reflects that Household South Africa will see a monthly income of R91 625, but have R151 000 worth of bills to pay. This means there is a monthly shortfall of nearly R60 000.
This shortfall will be financed with debt, which already stands (reworked to fit the budget) at nearly R4 million.
Interest payments will amount to R19 700 a month, or 21.5% of total income.
Furthermore, this shortfall needs to be financed with debt.
It is clear that this household needs urgent intervention, by either increasing revenue or cutting expenses. The latter is unlikely in the short- to medium term.