Zimbabwe News and Internet Radio

Mixed reviews for South Africa budget

By Milton Nkosi

South Africans are caught between a rock and a hard place following the reading of the 2019 budget speech.

Finance minister Tito Mboweni presents his 2019 budget speech in parliament, Cape Town,
Minister of Finance Mr Tito Mboweni presenting his 2019 Budget Speech during the Plenary of the National Assembly , 20 February 2019. Parliament, Cape Town. Elmond Jiyane, GCIS

Finance Minister Tito Mboweni warned that there are tough times ahead with economic growth predicted to be at 0.7%.

Many South Africans like pensioner Betty Sibeko, who lives in Soweto, the country’s largest township, are struggling.

She told me she can barely make ends meet from her 1,600 rand ($114;£87) monthly social grant which millions like her receive.

Mr Mboweni offered a lifeline to the country’s power utility Eskom which plunged the country into darkness last week.

He announced that Eskom will receive $1.63bn (£1.2bn) over the next three years but added that the utility firm will have to pay back the money.

The budget also increased taxes on fuel and luxuries such as whiskey and cigars.

Influential players in the private sector welcomed the budget saying that it was not populist, which could have been easy to do in an election year.

The leader of the opposition Democratic Alliance, Mmusi Maimane, said it was a “lipstick budget”, which looked good on the outside but with no job creating solutions.

Mr Mboweni hopes that his speech will keep the ratings agencies happy.

Government debt currently stands at 59% of GDP. There were fears that they would downgrade the country to junk status if debt had risen to over 60% of GDP ratio.

Mr Mboweni knows that he cannot celebrate until Moody’s, one of the three major credit rating agencies, makes its pronouncement. BBC News