Finance Minister Tito Mboweni. (Sumaya Hisham/Reuters)
Treasury has confirmed that Finance Minister Tito Mboweni will table his maiden Budget in Parliament on February 20 at 2pm.
The budget is usually scheduled for the second-last Wednesday in February, and the ratings agencies deliver their decisions after assessing the country’s plans for the fiscal year ahead.
Mboweni delivered the Medium Term Budget Policy Statement (MTBPS) in October, a couple of weeks after Nhlanhla Nene resigned from the position.
He faced a juggling act then, saying South Africa was at a “crossroads” with weak economic growth and a higher-than-expected tax collection gap. He increased the budget deficit for 2018/2019 to 4% with government debt rising to 55.8% of gross domestic product.
Economic growth is expected to modestly improve from 0.5% in 2018, to 1.3% in 2019, according to a report by Moody’s this week.
However, the ratings agency predicted that growth will be constrained by rigidities in the labour market and uncertainties around energy supply.
While Mboweni has expressed the view that Eskom should not receive further assistance from Treasury and South African Airways should be sold, Goldman Sachs believes major policy decisions will be postponed until after the elections.
“Given the current political constraints related to upcoming general elections (likely to take place in May 2019), any deeper-cutting and more comprehensive policies may only be possible post-elections,” the investment bank said in a note to clients this week.
South Africans have been invited to share their budget tips with Mboweni on Treasury’s website. — Fin24