He is expected to deliver a budget which address a persistently weak economy, escalating debt to GDP ratio and the highest unemployment rate since 2008.
He also has to deal with the contributing stumbling blocks presented by the Covid-19 pandemic and the fallout of South Africa’s year-long lockdown.
Mboweni has a tough challenge ahead in turning around a South African economy which has been on a steady downward trajectory for several years:
- Under Nelson Mandela, the average annual growth of gross domestic product was 2.7%. Unemployment was 25% and government debt (including that inherited from the apartheid era) was 48% of GDP.
- Under Mbeki, GDP growth averaged 4.1% annually. Unemployment went down to 23.7%, as did debt, to 44.5% of GDP (including apartheid debt).
- In the Jacob Zuma era from 2008 to 2017, annual average GDP growth shrank to 1.7%, while unemployment rose to 26.7% and debt spiraled to 62.2% of GDP.
- Under Cyril Ramaphosa, GDP growth (after Covid-19 in the third quarter of 2020) was just 0.2%, while unemployment rose further, to 32.5% (third quarter 2020 after lockdowns), while debt increased to 63.3% of GDP.
How the finance minister hopes to turn the tide is anyone’s guess.