South Africa’s 2019/20 tax revenues could be “significantly lower” than budgeted for and it may need to borrow more than planned, Finance Minister Tito Mboweni said on Tuesday.
Speaking while addressing parliament on a special appropriation bill in Cape Town, Mboweni said that that would make an extra 59 billion rand ($4.24 billion) available to Eskom, which had more than 400 billion rand of debt.
Mboweni said the lower tax receipts and additional costs related to Eskom “could substantially increase the government’s borrowing requirements for 2019/20”.
He added that the government would revise its funding strategy and weekly bond issuance to “levels beyond what we had planned.”
President Cyril Ramaphosa has staked his reputation on cleaning up corruption, problems at state-owned enterprises and reviving growth, but sluggish growth and issues at Eskom are proving difficult to fix.
Eskom, which supplies more than 90 per cent of the country’s electricity but was forced to implement power cuts this year, has failed to generate sufficient profit to meet its debt servicing costs and has required state cash injections to stay afloat.
The latest allocation, sourced from the government’s National Revenue Fund, provides 26 billion rand for the 2019/20 financial year and 33 billion rand for 2020/21.
Mboweni also said he expects to announce the appointment of a chief restructuring officer for Eskom later on Tuesday.