National Treasury has warned that South Africa’s public finances remain under heavy strain, with debt-service costs consuming more than a fifth of government revenue.

In its 2024/25 annual report released this week, Treasury said gross government debt had risen to 76.9% of GDP while debt-service costs reached R385.8 billion, or 21.3% of revenue.

Government’s gross borrowing requirement came in at R408.8 billion.

Despite additional tax increases of R15 billion in 2024/25, Treasury acknowledged that revenue fell short of expectations by R16.7 billion, underscoring the impact of sluggish growth on the fiscus. The South African Revenue Service nevertheless processed over nine million tax assessments and intensified its illicit-trade enforcement efforts.

Treasury also underscored progress on financial reforms, reporting that South Africa had addressed 20 of the 22 items required by the Financial Action Task Force, ahead of a review of the country’s greylisting this month. It highlighted the implementation of the Public Procurement Act, which saw nearly one million suppliers registered on the central database.

Despite weak GDP growth of just 0.6% in 2024 and unemployment stuck above 30%, Treasury said reforms in energy, logistics, and municipal finance are advancing. It said 2025/26 could be a turning point for debt stabilisation.