COSATU supports govt’s sober approach to releasing excess reserves from the SARB to ease the state’s budgetary challenges

26 March 2024

The Congress of South African Trade Unions (COSATU) supports government’s sober approach to releasing excess reserves from the South African Reserve Bank (SARB) to ease the state’s budgetary challenges. 

We welcome the National Assembly’s passage today of the Gold and Foreign Exchange Contingency Reserve Account Defrayal Amendment Bill providing for this relief for the fiscus.

Government is experiencing severe fiscal pressures combined with a painful revenue shortfall and many competing expenditure priorities.  Releasing R100 billion in 2024, R25 billion in 2025 and R25 billion in 2026 to ease the fiscal pressures facing the state whilst simultaneously ensuring the SARB retains sufficient reserves to protect the value of the Rand and economy and ensure its financial obligations are honoured is the correct approach, especially since there are sufficient reserves to do so.

We appreciate that these amount of reserves will not always be available and in reality this is a once off relief, albeit over three years, to assist the state to invest in public services, rebuild the State-Owned Enterprises, grow the economy and provide relief to the poor.  It is critical that this relief be used in a strategic manner that will grow the economy and not merely for consumption or recurring expenditure.

In particular it should be used to assist Eskom and Transnet as this will not only assist in rebuilding our two most critical economic assets but help unlock the mining, manufacturing and agricultural sectors in particular and the economy as a whole and also help save and create thousands of badly needed jobs.

Issued by Matthew Parks, Acting National Spokesperson, COSATU, 27 March 2024