Rand weakens, bonds pare gains after budget

Johannesburg - SA's rand weakened against the dollar and government bonds pared gains on Wednesday after Finance Minister Nhlanhla Nene raised income taxes, cut economic growth forecasts and widened budget deficit estimates.

Nene said in a budget speech that SA will raise income taxes for the first time in twenty years as weak economic growth kept revenues low and trimmed growth forecasts as chronic electricity shortages strangled economic activity.

Nene also said the government in Africa's most advanced economy would have to borrow from both domestic and global markets to plug the funding gap warning however that unsustainable debt levels would threaten its credit rating.