Finance Minister, Tito Mboweni, is on Wednesday expected to deliver the most crucial Medium-Term Budget Speech (MTBS) in recent memory before Parliament.
Government debt has reportedly skyrocketed and is expected to reach 60% of the GDP if nothing is done to cut back spending; the unemployment rate reached 29.1% – the highest in 11 years; there is low business confidence; the economy is not growing at the pace everyone would have wanted; there are reports of a tax revenue shortfall of R50-R80 billion among other challenges the country is facing like low rainfall and drought in provinces like the Eastern Cape.
Mboweni will without a doubt be walking a tight rope when he takes the podium in the National Assembly at 14:00hrs.
It’s not just South Africans, who will be watching, but investors and rating agencies as well.
About the Medium-Term Budget Speech
Also called the Mini-Budget, the MTBPS plays a critical role in the overall budget process because it sets out the policy framework for the upcoming budget and provides the country and its elected representatives an update on the National Treasury’s assessment of the current economic climate and outlook.
“The 2019 MTBPS will describe the policy framework for the 2020 Budget and indicate any adjustments that may be recommended to Parliament in respect of the current year’s expenditure plans,” the Treasury said.
“As a statement of government policy, it will also assess and explain the trade-offs and choices that must be made in order to ensure stable, balanced and sustainable economic growth.”