1 THE REPUBLIC OF SOUTH AFRICA Investor

Transcript:1 THE REPUBLIC OF SOUTH AFRICA Investor:
1 THE REPUBLIC OF SOUTH AFRICA Investor Presentation December 2014 Table of contents 1) Overview 3 2) Macro economic developments 8 2 3) Public finance 14 4) Financing of borrowing requirement 21 5) Holdings of government bonds 27 Slide 6) Monetary policy 30 7) Banking sector stability 36 3 1. Overview Key investment highlights 4 Broad political stability will remain, owing to the African National Congress (ANC)'s dominance at a national and provincial level National Development Plan (“NDP”) overview 5 The NDP was established in 2011 in a bid to eliminate poverty and reduce inequality in South Africa by 2030. Some of its key policy objectives are: Medium Term Strategic Framework (“MTSF”), implementing the NDP South Africa has begun a new phase of its democratic transition Electoral mandate of fifth democratic government is to deepen transformation and implement the NDP Mandate also speaks to accelerating growth, creating employment opportunities and promoting investment in a competitive economy. Constitutional commitment to providing improved quality of life for all citizens remains the key cornerstone Strategic plan for the 2014 – 2019 electoral term Reflects commitments made in election manifesto of governing party, including commitment to NDP MTSF sets out the actions government will take and targets to be achieved Provides framework for other plans MTSF highlights government’s support for a competitive economy Quality basic education Improved access to basic healthcare More efficient public policing and better law enforcement Skilled and capable workforce to support inclusive growth path An efficient, competitive and responsive economic infrastructure network Vibrant, equitable and sustainable rural communities contributing to food security Sustainable human settlements and improved quality of household life Responsive, accountable effective and efficient local government Protect and enhance our environmental assets and natural resources An efficient, effective and development-oriented public service 6 Background Priorities over next five years Purpose Summary of the Medium Term Budget Policy Statement (“MTBPS”) The budget policy framework for the next three years is designed to ensure fiscal sustainability while shifting spending towards government’s priorities as set out in the NDP and MTSF South Africa’s weaker-than-expected economic performance and outlook pose new fiscal challenges GDP growth of 1.4% is expected in 2014, rising to 3.0% in 2017 Government proposes a fiscal package that reduces growth in spending by lowering the 2014 Budget expenditure ceiling by R25`billion over the next two years and adjusting tax policy to generate additional revenue of at least R27