South Africas revenue performance during COVID and beyond The impact of commodity prices

Chloe Allison, Nkhetheni Nesengani and Nic Spearman

No 11044, Occasional Bulletin of Economic Notes from South African Reserve Bank

Abstract: Revenue rebounded strongly in the 2021/22 fiscal year following a sharp decline in 2020/21. This recovery was supported by a strong rally in global commodity prices. We assess the performance of the primary tax revenue streams over the 2020/21 and 2021/22 fiscal period and model the impact of the raised commodity prices. We estimate that 30% of the increase in gross revenue during the 2-year period is attributable to the growth in commodity prices. Using our model estimates together with official SARB projections for GDP and commodity prices we projected a revenue surplus of R92 billion compared to National Treasurys Budget Review 2022 estimate of R1,588 billion for 2022/23. The budget deficit falls to 4.3% compared to National Treasurys estimate of 6.0%, however, significant expenditure risks remain.

Date: 2023-06-29
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