What to expect in Mboweni’s mini-budget tightrope
Mboweni's address is expected to outline what government has done and will do to sail the country out of its current crises.
South Africa’s Finance Minister Tito Mboweni preparing to deliver the budget. EPA-EFE/Elmond Jiyane
Finance Minister Tito Mboweni is expected to walk a tightrope when he tables the medium-term budget policy statement in parliament on Wednesday.
Mboweni, who in February tabled his maiden budget, will highlight how adjustments made eight months ago have impacted the country, while also revealing government’s plans to meet its targets for coming years.
The medium-term budget will look at the expenditure cycle of government to explain how money was spent on programmes presented since February.
Can the country keep spending at a manageable rate?
Amid the bailouts of state-owned entities, economists have predicted that minimal growth figures – coupled with high unemployment numbers, debt owed to state-owned entities, and the South African Revenue Service’s inability to collect enough tax to cover debt – there is a possibility that Mboweni could raise taxes.
The medium-term budget could also spark a reaction from ratings agency Moody’s, which could downgrade South Africa’s sovereign credit rating to sub-investment grade, AKA junk status.
While last year’s medium-term budget policy statement was more closely linked to the ANC’s internal party politics, Mboweni’s major task on Wednesday will be to regain the country’s credibility in the eyes of investors.
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