{"id":90561,"date":"2025-09-28T18:40:01","date_gmt":"2025-09-28T18:40:01","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster"},"modified":"2025-09-28T18:58:02","modified_gmt":"2025-09-28T18:58:02","slug":"south-africa-facing-a-serious-disaster","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster","title":{"rendered":"South Africa Facing A Serious Disaster"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Renowned economist Dawie Roodt said South Africa is heading for a serious financial crisis due to the country\u2019s unsustainable debt levels.<\/p>\n

Roodt shared his views on the South African economy and the country\u2019s trajectory at the recent Biznews Conference in Hermanus.<\/p>\n

He told delegates that South Africa\u2019s national government debt-to-GDP (gross domestic product) ratio is around 77%.<\/p>\n

However, this only tells part of the story. The state is also responsible for a significant portion of the debt of state-owned enterprises and local authorities.<\/p>\n

Fifteen years ago, most state-owned enterprises and local authorities were able to cover their expenses without incurring debt.<\/p>\n

However, they have been run into the ground in recent years, accumulating high debt levels due to mismanagement and overspending.<\/p>\n

When their debts are combined with those of the national government, the country\u2019s debt-to-GDP ratio is approximately 85%.<\/p>\n

Even more concerning is that the country\u2019s debt is rising at an annual rate of around 2% to 3% of GDP, which should raise alarm bells.<\/p>\n

\u201cWe are heading for a serious financial crisis because South Africa\u2019s debt levels are around R6.5 trillion. That means every South African owes R100,000 more than they think,\u201d he said.<\/p>\n

Roodt explained that South Africa is spending money on things that will not result in economic growth, and it does so by incurring debt.<\/p>\n

\u201cSouth Africa is borrowing long-term money, and the Minister of Finance is spending it on short-term current expenditure, essentially destroying capital,\u201d he said.<\/p>\n

He stated that capital formation in South Africa is approximately 15% of the country\u2019s GDP. This needs to be increased to 25%.<\/p>\n

Capital formation is the increase in a country\u2019s stock of capital goods, which are long-term physical assets.<\/p>\n

These long-term assets include items such as machinery, buildings, and infrastructure used to produce other goods and services, rather than being consumed immediately.<\/p>\n

\u201cThe Minister of Finance is reducing South Africa\u2019s capital formation by destroying capital. The state is the biggest destroyer of capital in the country,\u201d he said.<\/p>\n

\u201cWe have low levels of savings, and a large part of these savings are destroyed by the government.\u201d<\/p>\n

7.9 million personal income taxpayers fund 28 million grant recipients<\/b><\/p>\n

Efficient Group chief economist Dawie Roodt<\/p>\n

Roodt explained that South Africa is in an unsustainable financial situation due to the structure of the economy and tax base.<\/p>\n

The 2025 Budget revealed that South Africa\u2019s 7.9 million personal income taxpayers fund 28 million grant recipients.<\/p>\n

However, these taxpayers also include many government employees. This means that approximately 30 million South Africans rely on a state income.<\/p>\n

The biggest revenue stream for the state is personal income tax. Here, 978,140 South Africans, or 1.5% of the population, pay 60.9% of all personal income tax.<\/p>\n

Even more concerning is that only 235,542 South Africans, or 0.4% of the population, pay 33% of all personal income tax.<\/p>\n

South Africa\u2019s latest tax statistics further reveal that only 1,051 companies pay 72.3% of all company income tax in the country.<\/p>\n

In other words, companies with taxable income greater than R100 million constituted 0.1% of the total number but contributed 72.2% of taxable income and 72.3% of assessed tax.<\/p>\n

South Africa is already over the Laffer curve with these two sets of taxes, which means that further tax increases will not produce additional tax revenue.<\/p>\n

\u201cThe state\u2019s finances are in very deep trouble and we are heading for a financial crisis in South Africa,\u201d Roodt said.<\/p>\n

He said the only way South Africa can fix its disastrous financial situation is through economic growth. \u201cThere is nothing else we can do,\u201d he said.<\/p>\n

The way to achieve this is by protecting private property rights, encouraging free trade, and having sound money.<\/p>\n

\u201cWhen you do these three things, I can guarantee you that the South African economy will grow,\u201d Roodt said.<\/p>\n

South Africa\u2019s core economic indicators<\/b><\/p>\n

For More News And Analysis About South-Africa<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Renowned economist Dawie Roodt said South Africa is heading for a serious financial crisis due to the country\u2019s unsustainable debt levels. Roodt shared his views on the South African economy and the country\u2019s trajectory at the recent Biznews Conference in Hermanus. He told delegates that South Africa\u2019s national government debt-to-GDP (gross domestic […]<\/p>\n","protected":false},"author":84,"featured_media":90560,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,12],"tags":[275],"class_list":["post-90561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-policy","tag-south-africa-2"],"yoast_head":"\nSouth Africa Facing A Serious Disaster - South Africa<\/title>\n<meta name=\"description\" content=\"Renowned economist Dawie Roodt said South Africa is heading for a serious financial crisis due to the country\u2019s unsustai ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Africa Facing A Serious Disaster\" \/>\n<meta property=\"og:description\" content=\"Renowned economist Dawie Roodt said South Africa is heading for a serious financial crisis due to the country\u2019s unsustai ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-09-28T18:40:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-09-28T18:58:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/09\/sm_1759073147.254741.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"South Africa Facing A Serious Disaster\",\"datePublished\":\"2025-09-28T18:40:01+00:00\",\"dateModified\":\"2025-09-28T18:58:02+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster\"},\"wordCount\":643,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/09\/sm_1759073147.254741.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"policy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-facing-a-serious-disaster\",\"name\":\"South Africa Facing A Serious Disaster - 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