Johan Fourie | Spending our public - and private - savings on consumption is a bad idea

The R150 billion drawdown from South Africa's GFECRA account was shortsighted, and doesn't set a good example for South Africans whose retirement savings are in desperate need of bulking up, says Johan Fourie.  

When Minister of Finance Enoch Godongwana announced in his February budget speech the drawdown of R150 billion from South Africa’s Gold and Foreign Exchange Contingency Reserve (GFECRA) account over the next three years, many commentators noted the obvious: that spending your savings on consumption is a bad idea.

Although the minister noted that the money will help keep borrowing and debt service costs low, it also allowed him to keep several spending programmes on the books. One is the Covid-19 Social Relief of Distress (SDR) grant until March 2025.