Economists: Mboweni’s budget leaves much to be desired
Finance Minister Tito Mboweni's medium term budget policy statement hasn’t made much of an impression among most economists.
Mboweni delivered the all-important mini budget in the National Assembly on Wednesday, where he projected an economic contraction of 7.8 per cent this year.
Economist Duma Gqubule says Mboweni’s budget left much to be desired.
“There’s nothing that has changed in terms of the numbers for this year from what he announced on the 24th of June in the supplementary budget. So what we saw is that the new money that being allocated into the economy in addition to what was being planned in the February budget is R26 million so nothing has really changed, all they did is to reshuffle the money.”
“If you look at the following two years, what has happened is that the government has delayed or has outlined a longer path to fiscal consolidation.”
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"What should be in consideration should also be looking at other areas in terms of what the minister said and that everyone must feel the pain," he said. "State-owned companies and entities, members of the legislature, provincial, national. He made it clear that we must look at this including all senior officials and political office bearers.
Mboweni also announced more bailouts for some state-owned enterprises, including South African Airways.
Efficient Group economist Dawie Roodt says Mboweni played a game of politics.
“I think it’s more on the political level than anything else. I think my first impressions were that Tito Mboweni lost the fight and Pravin Gordhan has won the fight and the reason why I say so is that initially in February made it clear that he’s going to cut back on spending, he’s not going to waste money and spend money on the state-owned enterprises. I’m afraid that is exactly what has happened,” Roodt says.
“In terms of ideology I think Pravin Gordhan, which is a socialist and which likes a lot of state spending, that Gordhan won the fight. This means that the president won the fight and Tito Mboweni has lost the fight, which essentially means that South Africans have lost the fight,” he adds.
Both economists believe South Africa is likely to remain in an economic limbo for much longer than they had hoped.
