Government committed to prudent fiscal policy says BoE private clients

"Given the global backdrop of sovereign risk and the potential for years of slower growth, as austerity and consolidation loom, the value of this commitment cannot be overestimated," Sessions said.

Country has to borrow

"Not only did Minister Gordhan highlight the trade-off between government consumption expenditure and infrastructure investment, but he also indicated a clear preference by stating that South Africa had to prioritise public infrastructure spending. He further demonstrated the government's commitment to enhancing the growth potential of the economy by saying that the country had to borrow to invest in infrastructure - not government consumption."

Gordhan also explained that for the next three years, the National Treasury will aim to moderate spending growth in order to stabilise debt as a percentage of GDP, so that Treasury could begin to rebuild fiscal space from 2014/15 onwards.

Commitment to prudence and fiscal consolidation

"This commitment to prudence and fiscal consolidation over the medium term suggests that SA's fiscal affairs will continue to stack up well in comparison with developed markets," said Sessions.

"This prudence should in the long run pay handsome dividends as the threat of higher taxes and interest rates in the future remain contained. This will enhance SA's attractiveness as an investment destination, should the government succeed in delivering on this promise of prioritising investment and rebuilding fiscal space."