Finance Minister Tito Mboweni painted a grim picture saying the country’s deficit has more than doubled from 6,4% of GDP in the 2019/2020 financial year to 15,7% this year.
Finance Minister Tito Mboweni delivers his Medium-Term Budget Policy Speech in Parliament on 28 October 2020 in Cape Town. Picture: GCIS
CAPE TOWN – A solid plan that will drive economic growth in the country is needed.
Mboweni painted a grim picture, saying the country’s deficit has more than doubled from 6,4% of GDP in the 2019/2020 financial year to 15,7% this year.
Tax Revenue would decline by R312.8 billion this year.
Dr Nthabiseng Moleko, a development economist at Stellenbosch University Business School, said South Africa needed an economic recovery plan that would drive more than 6% year-on-year GDP growth.
“The finance minister really had a difficult situation to deal with. I do think that his intent is being well-taken in terms of having to rebuild and rehabilitate the economy. But whether or not this will lead to the kind of recovery we want to see in the country, for me, is really what the problem is.”
Head of Economics at the Cape Peninsula University of Technology, Maarten van Doesburgh, said the country’s economic recovery plan needed granular details on exactly how new jobs would be created.
“I am a firm believer that the only way to sustain the economy and to create jobs is through private sector involvement and creating an environment for investment by the private sector and we are not seeing this. Nowhere do we see an environment being created for the private sector to invest and this is what we desperately need.”
WATCH: Mboweni: government is borrowing at a rate of R2.1 billion per day
(Edited by Mihlali Ntsabo)