There are several items that Finance Minister Enoch Godongwana needs to discuss on Wednesday. File Picture: Timothy Bernard / Independent Newspapers
This year’s Medium-Term Budget Policy Statement (MTBPS) will be presented at 2pm on Wednesday and plays an important role by providing a mid-year review of South Africa’s fiscal performance.
The speech informs South Africans if the targets that government set in the February Budget have been met and what needs to be implemented in the coming year.
The statement also recalibrates the Medium Term Expenditure Framework (MTEF), offering insights into shifting priorities and the impact of government’s fiscal planning, according to Casey Sprake, an investment analyst at Anchor Capital.
This year’s MTBPS is being presented amid a moderately improved economic outlook and the establishment of the Government of National Unity (GNU).
Business sentiment is rebounding as political and policy uncertainty ease, according to Nedbank’s Economic Review.
The bank said that government’s focus is firmly on service delivery, with the crowding-in of the private sector in the large infrastructure projects being prioritised.
South Africa has a fiscal consolidation issue as it is expected that the nation’s debt will rise to around 75.3% of gross domestic product (GDP) in 2025-26. The country’s debt accounted for 74.6 % of nominal GDP in June 2024.
"A R100 billion drawdown has helped stabilise the fiscal position in the context of fiscal consolidation,” said Investec Treasury Economist Tertia Jacobs told Bloomberg.
But South Africa's debt trajectory has improved as National Treasury has tapped into the country’s contingency reserves.
Finance Minister Enoch Godongwana will have to address these issues during the MTBPS and where SA stands when it comes to its debt burden.
Sprake noted that there are several items that Minister Godongwana needs to discuss on Wednesday.
Sprake’s wish list:
According to the Board of Healthcare Funders (BHF), Godongwana needs to address medical schemes and create low-cost benefit options for South Africans.
This should be addressed as government has yet to fully explain how it will implement and fund the National Health Insurance (NHI) Act.
Currently, just over nine million South Africans belong to a medical scheme, with 68% coming from previously disadvantaged groups, according to BHF.
The BHF estimates that an additional 10 million people from low-income households could have access to private healthcare coverage if medical schemes were permitted to offer low-cost benefit options (LCBOs).
LCBOs are pared-down medical aid packages that offer essential primary healthcare services.
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