The 2024 Medium-Term Budget Policy Statement (MTBPS) in South Africa, presented by Finance Minister Enoch Godongwana on October 30, 2024, outlined the government's strategic response to economic challenges and fiscal constraints amid declining tax revenues. This year’s MTBPS comes at a time when the National Treasury faces a significant revenue shortfall of around R22.3 billion for 2024/25, attributed to lower-than-expected collections across various tax categories, including income tax and fuel levies. Factors like reduced energy-related imports and weaker private sector employment have contributed to this shortfall, while domestic VAT has performed slightly better due to increased corporate earnings in certain sectors.

The MTBPS has emphasized fiscal consolidation, prioritizing cost reductions in government spending while seeking to stimulate economic growth through infrastructure improvements. The government announced targeted cuts in baseline spending and a reduction in borrowing costs driven by falling bond yields. It also highlighted ongoing reforms to boost economic efficiency, especially in critical areas like electricity and freight logistics, which are intended to enhance growth in the medium term.

To balance these fiscal constraints, the government has deferred new tax increases, banking instead on improved tax compliance and economic reforms to increase future revenues. Projections for GDP growth have been cautiously set at 0.8% for 2024, but with hopes to reach 1.6% by 2025 if key infrastructure and economic reforms progress as planned