#SOUTHAFRICA: President Cyril Ramaphosa, in his State of the Nation Address, assessed South Africa’s socio-economic situation and announced a government programme to improve the conditions of life for citizens of South Africa.
The 2019 Budget Speech, which Minister of Finance Mr Tito Mboweni will deliver to the National Assembly sitting on 20 February, will give details of spending and revenue collection plans to carry out the programme.
In addition to delivering the 2019 Budget Speech, Minister Mboweni will table the Division of Revenue Bill and introduce the Appropriation Bill and the Public Audit Excess Fee Bill.
South Africans are hoping for some positive outcomes after a tough period recently. With food and transport prices increasing over the past year, beneficiaries are waiting to hear if Mboweni will be giving them extra support.
Especially the millions who rely on government grants.
In former Finance Minister, Malusi Gigaba’s speech he had the unpleasant task of hiking VAT from 14% to 15% – the first since South Africa became a democracy – sparking the fury of unions and the opposition.
That was inevitable due to the fiscal hole made much deeper by former President Jacob Zuma’s bombshell announcement of fee-free higher education: R57 billion was set aside to cover that for three years.
There was a little relief for some taxpayers, but fuel levies rose by 52 cents a litre, setting the stage for more pain when the rising cost of oil drove up prices at the pump, hitting consumers hard.
Ahead of the speech today, social media users are despondent, hopeful and expect some relief amidst South Africa’s major issues that have affected them directly.
Less than a week after his debut, Gigaba was replaced by Nhlanhla Nene in President Cyril Ramaphosa’s first Cabinet shake-up. By October, Nene had stepped down and it was up to former SA Reserve Bank governor Tito Mboweni to deliver the mid-term Budget review.
“South Africa is at a crossroads,” Mboweni said.
The growth forecast was slashed by half, from 1.5% to a paltry 0.7%. “South Africa is at a crossroads,” Mboweni said.
Mboweni spoke of difficult choices, including a “hard look” at SOEs and the government’s ever-increasing salary bill, after last year’s wage agreement blew February Budget targets by R30bn.
Economist Iraj Abedian, of Pan-African Investment and Research Services, says the only good news we can expect is that “there will be no more bad news”.
Eskom, responsible for producing 95% of the country’s electricity, is mired in debt and inefficiencies. Recent days of load-shedding have left the economy reeling – and the 96-year-old giant parastatal is now considered a threat to national security, because if it crashes and burns, so does the economy.
Plans to steer it out of crisis will take centre-stage in Mboweni’s speech today. Whatever package he unveils, every South African will be footing the bill.
Just twelve months down the line since Gigaba channeled Kendrick Lamar, we’re clearly not “alright”.