With the sound of applause that usually fills the room as Finance Minister Tito Mboweni approaches the podium ahead of his budget speech in past years clearly absent, Mboweni’s readjusted 2020 budget speech was set to be a first of its kind.
Mboweni’s readjusted 2020 budget speech was always going to be a first of its kind.
Instead of delivering the speech before a joint sitting of Parliament, with the sound of applause as he approached the podium, Mboweni on Wednesday gave his first ever virtual budget speech due to the Covid-19 coronavirus pandemic currently ravaging the world.
Mboweni was also without his favourite Aloe Ferox plant which he introduced to South Africans in his budget speech in February last year.
It sat on the podium alongside him, never out of view.
The Aloe Ferox was brought out again for the mid-term budget policy statement in October and a tradition was born as Mboweni had it to his right in February this year.
However, its absence set the tone for what was expected to be a gloomy emergency supplementary budget.
This time around Mboweni had to forego the company of his plant and his parliamentary counterparts.
The absence of the Aloe Ferox that “survives and thrives when times are tough and lives even when it seems like the odds are against it” was a clear reflection of what was to come.
While the setup of the venue was simply laid out with nothing but the country’s national flag behind Mboweni, the task before him was anything but simple.
With South Africans reeling from the effects of the Covid-19 coronavirus pandemic, Mboweni’s speech further dampened spirits with unemployment on the rise, a contraction in economic growth and an increase in accumulated debt as the country is set to borrow $7billion from international financial institutions.
Looming large is the possibility of rising interest rates.
“A sovereign debt crisis is when a country can no longer pay back the interest or principal on its borrowings. We are still some way from that. But if we do not act now, we will shortly get there,” the minister said.
“But debt is our weakness. We have accumulated far too much debt.”
Mboweni – clad in a blue striped suit, blue shirt and matching tie, – proceeded to offer a glimpse of hope in efforts to help contain the spread of Covid-19 and the economic fallout it has induced.
“The supplementary budget proposes R21.5 billion for Covid-19 related healthcare spending,” Mboweni said.
“It also proposes a further allocation of R12.6 billion to services at the frontline of our response to the pandemic.
“This money partly supports increased screening and testing, allowing us to open up more and more of the economy.”
Just like his speech on Wednesday was a first of its kind, Mboweni went on to announce another first.
“Honourable members, projected total consolidated budget spending, including debt service costs, will exceed R2 trillion for the first time ever,” he said.
Although hardly a surprise, Mboweni’s speech painted a bleak picture of the country’s current economy.