Mboweni calls for end to ‘inertia’ on economic reforms

Finance minister Tito Mboweni
Finance minister Tito Mboweni

Finance minister Tito Mboweni has called for an end to the “inertia” holding back structural economic reforms in SA.

As the country starts off the new year battling load-shedding, and shrinking expectations for growth, Mboweni warned that “if you cannot effect deep structural economic reforms, then game over”. 

“Stay as you are and you are downgraded to junk status! The consequences are dire,” Mboweni said in a series of tweets early on Friday.

The country needed to move forward with the reforms outlined in the National Treasury’s economic strategy paper, he said.

The document was first put forward in the lead-up to 2019’s medium-term budget policy statement,  but was met with a frosty reception by Cosatu and the SACP.

Though Cyril Ramaphosa took over the presidency in early 2018, promising to revitalise the economy, tensions in the ruling party have muddied the waters regarding the direction of economic policy.

Mboweni’s tweets come as SA is still experiencing rolling blackouts by Eskom, which is weighing on already dismal expectations for economic growth.

On Wednesday, the World Bank cut its 2020 growth forecasts for SA to 0.9% citing persistent policy uncertainty, constrained fiscal space, weak business confidence and poor electricity supply.

Meanwhile, Nedbank has cut its expectations of growth for the year thanks to risks posed by power cuts and lack of policy implementation.

Data released on Thursday revealed business confidence for 2019 averaged 34-year lows, and worse-than-expected November factory output firmed up expectations that SA closed out the year with two consecutive quarters of economic contraction — a technical recession. — BusinessLIVE