C2M Chartered Accountants Newsletter: 2024 Budget Speech Analysis

Dear Valued Clients,

In the wake of South Africa’s 2024 Budget Speech, it’s essential to dissect the figures and forecasts presented, to understand their implications on both the macroeconomic environment and your personal financial landscape. At C2M Chartered Accountants, we aim to provide you with a comprehensive analysis, focusing on key budget figures, economic outlooks, and strategic adjustments, ensuring you’re well-informed and ahead in your financial planning.

Economic Outlook and Fiscal Framework

Global and Domestic Growth Projections

  • Global Growth is forecast to marginally increase from 3.1% in 2024 to 3.2% in 2025. This slight uptick reflects recovery in major economies and emerging markets, albeit with risks due to potential global oil price spikes and uncertainties in China, South Africa’s largest trade partner.
  • Domestic Growth remains subdued, with GDP growth revised down to 0.6% in 2023 from an earlier estimate of 0.8%. For the period 2024-2026, growth is projected to average 1.6%, supported by easing power cuts and lower inflation but hampered by structural constraints and high sovereign credit risk.

Fiscal Strategy and Debt Management

  • The Budget Deficit for 2023/24 has worsened to 4.9% of GDP, up from the previously estimated 4%. This adjustment reflects heightened debt-service costs, which have been revised upwards by R15.7 billion to R356 billion, consuming over 20% of revenue.
  • Debt Projections show debt peaking at 75.3% of GDP in 2025/26. Through expenditure reduction and revenue adjustments, the gross borrowing requirement is expected to decrease from R457.7 billion in 2024/25 to R428.5 billion in 2026/27.

Sector-Specific Highlights and Financial Allocations

Supporting Economic Growth

  • Electricity Sector: Investments in renewable energy are encouraged through an increased limit for carbon offsets from 15 to 30 megawatts. Eskom’s debt relief plan and the imminent release of a report on the review of coal-fired power stations underscore efforts to stabilize and reform the sector.
  • Logistics and Infrastructure: The Freight Logistics Roadmap and private sector partnerships, particularly in port upgrades and rail network access, highlight a push towards improving operational efficiencies. Transnet receives a R47 billion guarantee facility, signaling substantial government backing for logistics revitalization.

Taxation and Revenue Measures

  • Tax Revenue: For 2023/24, a shortfall of R56.1 billion from earlier estimates, underscoring the economic strain. Over the medium term, revenue projections are R45.6 billion higher than previous estimates.
  • Personal Income Tax: No adjustments for inflation to the tax brackets, rebates, and medical tax credits, effectively increasing the tax burden on individuals.
  • Excise Duties: Above-inflation increases for alcohol and tobacco products, including a notable R5.53 increase per bottle of spirits and a 97 cents increase per pack of cigarettes. New excise duties on electronic nicotine delivery systems are set at R3.04 per millilitre.
  • Environmental Taxes: The carbon tax is increased to R190 per tonne of carbon dioxide equivalent. The fuel levy adjustments aim to mitigate the cost-of-living impact, with no increases to the general fuel levy for 2024/25.

Social and Public Investment

  • Education and Health: Additional allocations include R25.7 billion for education to cover wage increases and R848 billion to the health sector over the medium term. These investments underscore the government’s commitment to social welfare and service delivery improvement.
  • Social Grants: Increases across various grants, including a R100 increase for old age, disability, and care dependency grants, aim to alleviate the financial strain on vulnerable populations.

Strategic Implications for Our Clients

This budget, characterized by its cautious optimism amidst challenging economic conditions, necessitates astute financial planning and strategic foresight. For individuals, the non-adjustment of tax brackets means higher effective tax rates, making tax planning more crucial than ever. Businesses, particularly those in sectors earmarked for growth and reform, must navigate the changing landscape with agility, leveraging government incentives and adjusting to new regulatory frameworks.

At C2M Chartered Accountants, we stand ready to guide you through these changes, ensuring your financial strategies are both resilient and responsive to the evolving economic environment. Whether it’s optimizing your tax position, exploring new investment avenues, or restructuring your business operations, our expertise is at your disposal.


As we move forward, let’s embrace the opportunities and challenges this budget presents, with C2M Chartered Accountants as your trusted partner. Together, we will navigate the complexities of the fiscal landscape, steering your finances towards growth and stability.