South Africa’s Finance Minister Enoch Godongwana will present his Budget speech to Parliament and the nation, hot on the heels of President Cyril Ramaphosa’s State of the Nation Address (Sona).
Godongwana will be juggling the country’s finances to make good on the president’s promises he made during Sona.
Economists have said that the finance boss is faced with a difficult task once again this year with the compilation of this year’s national budget.
Frank Blackmore, lead economist at KPMG South Africa, told Business Report, “I foresee difficulties from both a tax revenue and expenditure perspective. The rapid increase in inflation and accompanying interest rates through 2022, along with a serious problem of inconsistent and insufficient electricity availability, have meant that potential growth prospects over the next two to three years have been drastically diminished.”
“In order for the government to be able to implement various initiatives mentioned by the President in his State of the Nation Address, funding will need to be allocated. An example is the 1.5 trillion mentioned by the president that’s to be spent on the just transition, or those renewable energy projects mentioned over the next five years. One would therefore expect to see a large increase in the funding allocation towards those capital expenditure projects in the budget where the current proportion of expenditures remained relatively stable around 4% of total expenditure. Given the reductions in the potential tax revenues that will be collected over the next few years, emphasis will need to be on reducing the costs of government and the efficient allocation of those revenues to where they will be most efficiently used to service the needs of most South Africans,” Blackmore further said.
Listen to Blackmore speak more about his budget expectations below:
BUSINESS REPORT