By Hajira Khota 11.11.2021
Enoch Godongwana, the Finance Minister, is set to give his first medium-term budget today, with experts predicting that he will stick to the current fiscal consolidation course. South Africans and investors alike will be watching to see if Godongwana maintains his predecessor, Tito Mboweni’s, more fiscally responsible policies, which were aimed to boost business growth, grow the fiscus, and create employment.
Following the riots and looting in July, Godongwana is under increased pressure from various sources to increase government spending in order to implement a basic income grant.
Analysts anticipate some positive news in the shape of a tax overrun in Thursday’s Medium-Term Budget Policy Statement, thanks to surging commodities prices. The stronger-than-expected economic rebound and the spike in global commodity prices have bolstered tax receipts, which have surpassed the estimates stated in February’s national budget. Over the medium-term expenditure framework, total revenue is expected to be more than R350 billion more than February’s predictions.
Wits Business School professor Jannie Rossouw spoke to Radio Islam International; he says that fiscal sustainability will help to improve South Africa’s credit rating will help investor confidence in South Africa.
“The way government can stimulate the economy is to allow more space for the private sector to employ more people”.
According to wealth management experts at advisory group Citadel, when Godongwana, delivers his first Medium-Term Budget Policy Statement, he will need to focus on business-friendly policies that stimulate sustainable economic growth to ensure that the country avoids real fiscal difficulty in the next two to three years.
Rossouw says that the economy needs to grow and to create employment as it is a desperate need.
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