South Africa has recorded its “largest tax shortfall on record” – 213 billion rands (14.5 billion dollars).
Finance Minister, Tito Mboweni said on Wednesday during his 2021 budget speech that the state will have to borrow more than 500 billion rands (34 billion dollars) each year in the medium term.
He warned that “public finances are dangerously overstretched.”
The unemployment rate in South Africa has reached a record high of 32.5 per cent, as the number of jobless grew to 7.2 million in the fourth quarter of 2020 – the highest unemployment rate since 2008.
However, the economy is expected to rebound by 3.3 per cent this year, following a 7.2 per cent contraction in 2020.
Africa’s second-largest economy after Nigeria, South Africa is hoping to boost its economy with a fuel levy, an increase in alcohol and tobacco duties as well as strong infrastructure investments, Mboweni said.
Mbwoweni allocated more than 10 billion rands (683 million dollars) for the purchase and delivery of vaccines over the next two years.
South Africa also increased its contingency reserve from 5 billion rands (342 million dollars) to 12 billion rands (820 million dollars) to cater for any other emergencies, the finance minister added.
South Africa has been the nation most affected by the COVID-19 pandemic on the continent, with more than 1.5 million reported cases and almost 50,000 deaths.