Riyaz Patel
“In the last few years, South Africa’s economy has significantly underperformed. Our current GDP performance on a per capita basis is the weakest since the 1960s,” Finance Minister Tito Mboweni said during his department’s budget vote in Parliament Thursday.
Mboweni pointed to domestic constraints as the main cause of persistent under-performance.
South Africa’s “economic growth has lagged behind global and other emerging markets. Real GDP has grown slower than population growth for 5 consecutive years,” he added.
The total allocation to this vote in this financial year is R30.8 billion, Mboweni said.
A large chunk of the minister’s budget vote focussed on embattled state power utility, Eskom.
“Eskom presents the biggest risk to the fiscal framework.”
Finance Minister Tito Mboweni
Mboweni said he is considering introducing a “special appropriation bill on the 23 July 2019 to make additional funding available for Eskom for the current and the next financial year.”
He believes Eskom presents the biggest risk to the fiscal framework because of its financial problems and negative impact on the lives of ordinary South Africans.
“Given the high risks to the economy of a systemic failure if Eskom were to collapse, government is urgently working on stabilizing the utility, while developing a broad strategy for its future,” Mboweni said.
He added that “Once the annual Appropriation Bill, currently before Parliament, is law, additional financial support will be provided to SOEs, namely: SAA, SABC and Denel from the contingency reserve.”
But Mboweni pressed home that these interventions should not be construed to represent a government blank cheque to SOEs.
During this financial year, the National Treasury will also table a new Procurement Bill as a single overarching legislation for public procurement in the country, Mboweni said.
“We will introduce a procurement data transparency portal where all procurement data will be easily accessible for the monitoring of government projects.”
