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Case Study: South Africa's Medium$-$Term Budget Policy Statement $($MTBPS$)2023$

On November $1,2023.$ South Africa's Finance Minisfer Enoch Godongwana, presented the Medium$-$Term Budget Policy Statement $($MTBPS$)$ to Parliament. This Three velars especialy given the country's current fiscal challenges. $$ deth proscled to reach neatly $75\%$ of GDP$,$ the MTBPS serves as a critical reflection of South Africa's economic landscape as the nation approaches its $2024$ elections.

Economic Context

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Global Financial Crisis. The economic downturn beginning in $2007$ led to reducad revenues.

State Capture and Power Outages: Persistent slow economic growth, exacerbated by issues of governance.

COVID$-19$ Pandemic: The pandemic placed additional strains on public finances.

These eiements culminated in a national debt increase of approximately $47$ percentage points since $2008,$ raising concerns about debt sustainability. Key Issues in the MTBPS

Revenue Collection Shortfalls

A reported $$

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The decline in tax collection highlights broader economic challenges, including diminished growth and investment

Public Sector Wage Dynamics

The MTBPS illustrates ongoing tensions between the National Treasury, which seeks to control wage increases, and other govemment departments advocating for higher salaries.

The treasury budgeted for a wage increase of less than $2\%,$ while actual increases reached $7\mathrm{.}5\%.$ This discrepancy led to cuts in public sector employment to manageevaluate the implications of South Africans medium$-$term budget policies statement of $2023$ on the public finance and governance and respond in your answer responds consider the following featuring this highlighted in the medium term but it policy including revenue collection and public sector which