Unpredictability of load shedding making life hard for SARB - Godongwana
Finance Minister Enoch Godongwana responded to the debate report of the Standing Committee on Appropriations on the Appropriation Bill in Parliament on Thursday.
The debate follows after Godongwana tabled the national treasury's R34.9 billion budget vote for the 2023/24 financial year in parliament in May.
The bill was adopted with 125 MPs voting no and 225 voting in favour of it.
Godongwana told members of Parliament that at least R140 billion had been allocated to assist the poor.
"We have about R40 billion which is looking at the SRD grant R25 billion looking at extended public works programs, about another R10 billion looking at public employment programs, rounding that up it is about R70 billion which is an addition to other R70 billion which look at indigent policies. That takes it to R140 billion subsidising the poor."
He added that the growth outlook at the South African Reserve Bank has moved to 0.3% from its previous prediction of 0.2%.
"We are debating this appropriation bill in a changed environment from February, no doubt about that, which over time is likely to have an impact on the numbers that we are going to table in the Medium-Term Budget Policy Statement. The assumptions, for instance, we made were that the growth outlook will be 0.9%. The Reserve Bank at the time was sitting at 0.2% and has now moved to 0.3%. What makes these differences in the assumptions? The difference in the assumptions is 0.1%.
"There is an issue of interest rate and inflation targeting and I think part of the difficulty, not necessarily on the Reserve Bank if the honourable members were to watch what was happening on the run. The function of the Reserve Bank is not only to fight inflation but to protect the value of the currency, in the presence of movements of the currency as a result of global issues the reserve bank has an obligation to protect the currency.
"The difference in the assumptions is how you model the intensity of load shedding not much on the fundamentals that are there. The question is how do you model the assumptions of load shedding? And indeed, load shedding is likely to have an impact which may be substantial, we are going to watch the developments over the next few months and revise our numbers if necessary, accordingly, “ said Godongwana.
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