All eyes on Tito’s mini-budget speech
Tense wait to see how finance boss deals with economic woes
South Africans will be looking to new finance minister Tito Mboweni to see how he envisages turning the country’s economy around when he delivers his mini-budget speech on Wednesday.
On October 9, a familiar face rejoined cabinet when President Cyril Ramaphosa announced Mboweni as the new finance boss.
Just more than a month earlier, the SA economy officially entered a technical recession, after Stats SA announced on September 4 that the country’s real gross domestic product had decreased by 0.7% in the second quarter of the year.
On Wednesday, Mboweni will deliver his maiden medium-term budget policy statement in parliament and many South Africans are looking to him to relieve the strain on their personal finances, strengthen prospects for job creation and bolster the economy as a whole.
Glenn Gillis, managing director of tech innovation group Sea Monster, said while there was much pressure on the new minister, there needed to be considerable focus on the small business space.
“What are Treasury and government really doing to effectively spur entrepreneurship, not just in the short-term, but over the next 10-15 years?
“We hear so much about the Fourth Industrial Revolution but I would like to see concrete plans from major role players, such as the government, on what they’re doing to prepare employers and employees of today and tomorrow for this,” he said.
Nelson Mandela Bay Business Chamber CEO Nomkhita Mona said though Mboweni’s budget was not likely to include new priorities, it is the chamber’s hope that some of the funds for Ramaphosa’s stimulus package would be allocated towards industrial development in the metro.
“Nelson Mandela Bay is the infrastructural hub of our province and region.
“It is therefore vital that the maintenance of our road networks and electrical and water infrastructure is well-funded, in order to promote the ease of doing business efficiently and inexpensively.
“This, in turn, will contribute to economic growth and job creation.
“The country’s sluggish economic growth is a major challenge, coupled with the recent technical recession, the high unemployment rate and inequality.
“These are all areas that require solutions from the highest levels of government,” Mona said.
Teddy Daka, CEO of Etion Limited, a diversified digital technology solutions provider, said SA’s slow economic growth was a major cause for concern for all of its citizens – private and corporate.
“If this is to be turned around a number of things are critical.
“Our state-owned entities urgently need to be stabilised, particularly to reverse the pressure they are placing on public finances.
“Further, we need strategic investment into technology infrastructure which can enable business and the public sector to operate more efficiently and cost-effectively and improve service delivery across the board,” Daka said.
In the tourism sector, Thebe Tourism Group CEO Jerry Mabena said the industry was poised to deliver much-needed employment and as such would like to see the mini-budget focus on tangible plans for job creation through agriculture and tourism.
“We are looking forward to the minister giving direction and realisation of how the president’s job creation undertaking will be made real.
“The minister should provide a clear indication of how [the government] plans to reduce the staggering unemployment rate of 27.2% and how it’ll support SMEs in the tourism sector by creating an environment to allow for the sustainability of SMEs and assist them with financial support,” Mabena said.
Last year’s maiden medium-term budget, delivered by then finance minister Malusi Gigaba, received a pummelling from the market as the deficit ballooned, revenue collection tanked, spending breached its limits and debt soared to unprecedented levels.
Gigaba’s most alarming announcement, however, was the dramatic increase in the debt burden, which was expected to soar to 60.8% of gross domestic product by 2022.
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