High expectations for South African finance minister’s budget speech

Close-up of a Calculator and Pen on a Financial Newspaper. Blue-toned.

South Africa’s Finance Minister Tito Mboweni will have to walk on a tight rope as he tries to introduce interventions to grow the economy, address social challenges and introduce austerity measures when presenting the budget speech in parliament next week, said an expert.

William Mpofu, researcher at Wits Centre for Diversity Studies, told Xinhua that South Africans have high expectations for Mboweni.

He pointed out that the budget speech comes at a time when the country is facing low growth rate, poverty, unemployment and inequality.

“I expect a strong statement of the state owned enterprises (SOEs) who are faced with management, corruption crisis, and abuse of funds. We wait to hear what practical and durable steps the government will take in the short term and long term to address the rot in the SOEs,” said Mpofu.

Many SOEs have been under-performing and making losses with the government bailing them in most cases. The power utility Eskom is currently implementing load shedding because of poor decisions, corruption and aging infrastructure.

Mpofu said the minister is expected to deliver a speech which will bring confidence to the investors.

He said, “We expect drastic measures from the minister to grow the economy and restore confidence in the economy. I expect the speech to inspire confidence in the local and international investors for the country to be an investment destination.”

Economists have warned that the country have low consumer and business confidence. Many have said the low growth rate which have been below 1 percent for years does not keep up with the growing population.

Mpofu said, “Many South Africans expect to hear pronouncements on the energy sector and service delivery.”

Presenting the state of the nation address last week, President Cyril Ramaphosa noted that the country faced low growth rate and growing debt which needs to be contained. He said Mboweni would address these issues in the budget speech and also announce how far the government had gone in establishing the state bank. Enditem


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