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GOLD AND FOREIGN EXCHANGE CONTINGENCY RESERVE ACCOUNT UPDATE
- 22 October 2024
- National Treasury
- SA Legal Academy
National Treasury has issued a media statement intended to further clarify gold and foreign exchange contingency reserve account (GFECRA) reform and accounting matters. This follows:
- an agreement between National Treasury and the South African Reserve Bank (SARB) intended to ‘reduce government borrowing and … growth in the stock of debt’, and
- the June 2024 commencement of the GFECRA Defrayal Amendment Act, giving effect to the agreement (as SA Legal Academy reported at the time).
The statement includes the following explanation of a balance sheet transaction and its treatment in the upcoming 2024 Medium Term Budget Policy Statement (MTBPS):
‘R200bn in cash from an investment was received into the bank account of government, of which R100bn was requisitioned by … National Treasury to contribute to the SARB contingency reserve account. The balance of R100bn remains as a positive balance that is used to reduce the gross borrowing requirement.’
Finance Minister Enoch Godongwana is expected to deliver the next MTBPS on 30 October 2024, when he will also table various Bills giving effect to tax and other proposals in the 2024/25 Budget. The MTBPS process and purpose are unpacked in an edu-sheet recently posted on the National Treasury website in nine official languages.
In anticipation of the MTBPS, the National Assembly and NCOP Finance Committees have issued a joint notice announcing 6 November 2024 as the date on which parliamentary hearings will take place on the revised fiscal framework and revenue proposals to be tabled with the MTBPS.
Since these documents will only be available after they have been tabled, stakeholders will have just four days in which to make written submissions – 4 November 2024 having been set as the deadline.
- National Treasury media statement
- parliamentary finance committees’ joint media statement
- edu-sheets
- SA Legal Academy report on GFECRA Defrayal Amendment Act
Published by SA Legal Academy Policy Watch
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