Tightening of Exchange Controls by the National Treasury

Estimated read time 3 min read

Surprisingly, the National Treasury did not increase South Africa’s foreign allowances in its 2023 Budget.

It was the 11th consecutive year that the Single Discretionary Allowance (SDA) of R1 million and the seventh successive year that the Foreign Investment Allowance (FIA) of R10 million remained unchanged.

Unfortunately, inflation and a much weaker exchange rate have significantly reduced the dollar amounts South Africans can send offshore. It suggests that the National Treasury has progressively tightened exchange controls, almost by stealth.

This starkly contrasts the government’s steady relaxation of exchange controls since 1994.

The first democratic government inherited stringent exchange control regulations in 1994 but initiated a steady process to allow South Africans to take money offshore.

This relaxation process gained momentum in 2011 when the bank set the SDA at R1 million and the FIA at R4 million per year, subject to approval from the South African Revenue Service (Sars).

This meant South Africans could move R5 million offshore without much hassle if their tax affairs were in order.

In 2015 the bank hiked the FIA to R10 million but kept the SDA of R1 million unchanged, which more than doubled the investment ceiling to R11 million.

All and sundry were delighted with the announcement, and for 99% of South Africans, it was akin to the scrapping of exchange controls altogether, as very few had the means to send R11 million offshore.

However, since 2015 the National Treasury has not increased the limits.

Unfortunately, there are rumblings of discontent that inflation and a much weaker rand have rendered these limits, especially the SDA, insufficient.

The table below shows the impact of the weaker rand. The average exchange rate in 2015 was R12.50 per dollar, weakening to R16.38 to the dollar in 2022.

This means the $861 800 South Africans could take offshore in 2015 dropped to around $671 500 last year.

Source: The author

In fact, the $671 500 South Africans could take out last year was slightly less than the $689 000 they could export in 2011 under the old regime when the FIA was R4 million and the SDA R1 million.


The growing discontent is not directed at the R10 million FIA but rather the R1 million SDA, which has remained unchanged since 2011. There are several differences between the two.

The SDA may be used for virtually any purpose, such as funding offshore expenses and supporting families, and the FIA may only be used for investments.

In 2011, the average exchange rate was R7.26 per dollar which means the SDA allowed $137 800 to be transferred offshore.

However, in 2022 the average exchange rate was R16.38 per dollar which reduced the amount to $61 000 – less than half the 2011 amount.

Source: The author

If South Africans wanted to remain in the position to export $137 800 in 2022, the SDA would have to be raised by 125% to R2.26 million.

Credit – Taken from – https://www.moneyweb.co.za/news/south-africa/national-treasurys-stealthy-tightening-of-exchange-controls/

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