Finance Minister Tito Mboweni will this week table a revised budget for this year. This comes after the unprecedented impact of COVID-19 pandemic worsening the already weak local economy.
The budget was already delivered in February. But then things changed. The COVID-19 pandemic hit South Africa and the government said it would have to loan additional funds and reallocate some spending towards health and more social grants.
The new budget will provide details on the reprioritisation of funds and the R500 billion stimulus package announced by President Cyril Ramaphosa.
SABC’s Arabile Gumede analyses the market’s reaction after the announcement of the stimulus package:
The local economy was already in recession before the coronavirus hit and worsened economic conditions. The National Treasury will likely revise downwards its economic growth forecast to reflect a deep contraction.
Apart from the effects of the pandemic, the economy is also facing structural constraints, poor sovereign ratings, and increasing debt.
Measures to curb the spread of the virus have seen companies unable to operate, leading to loss of income and job losses. This will lead to even lower revenue collection on the face of increased spending demands.
DA calls for a ‘resilience budget’
The Democratic Alliance (DA) has called on Finance Minister to table a budget that will put the country in a position to weather the tough economic conditions it will face due to the global coronavirus pandemic.
Speaking during a virtual media conference, DA Finance Spokesperson, Geordhin Hill-Lewis, says the lockdown has placed individuals, businesses, and the government in vulnerable positions.
“We need a ‘resilience budget’. In this dire context, a resilience budget must acknowledge that neither austerity (sharp cuts to basic services) nor a big expansion in spending is possible now. The only available option is a very careful deployment of debt to fund the crisis response while ensuring economic reform can spur growth, and showing a clear path to debt stability.”
Cosatu deputy parliamentary Coordinator, Matthew Parks looks at the labour’s expectations ahead of the revised budget:
Minister Mboweni’s budget preview with Chief Economist at Econometrix, Dr. Azar Jamminne:
SMEs hardest hit
Businesses around the world have been devastated by the global coronavirus pandemic. But small and medium-sized companies are being hit particularly hard.
The taxi industry is no exception. These challenges mean possible job losses in most of the small and particularly, unorthodox businesses. Economist Owen Nkomo gives us a sense of how serious this is:
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