Minister of Finance Tito Mboweni’s budget speech will likely not be enough to stop the wave of challenges dogging the country’s economy, Business Unity South Africa president Sipho Pityana has said.
In a statement, Pityana said the budget speech lacked bold steps to stop parastatals from sapping money from the fiscus, as well as concrete solutions to the swelling public service wage bill and the lacklustre performance of the economy.
Pityana lauded the minister’s frank account of the state of affairs, but said he was likely a day late and a dollar short with the much-needed honesty.
"This Budget is a wake-up call that South Africa has run out of time. It affects all of us, and we should all be concerned. Drastic interventions are needed by government to provide clarity on economic policy, manage government debt, and contain the increasingly negative economic impact of ailing state-owned entities," said Pityana.
Pityana said the economy was projected to have grown by less than 1% in 2018, and the growth estimates for the medium term remained low compared to the country’s ambitions.
"This is further compounded by a weakening global economic growth rate. In addition, the Budget speech has not gone far enough to alleviate policy uncertainty, which is the primary factor cited for the country’s low investment rate," he said.
While he welcomed the announcement that the State no longer advances guarantees to entities for operational purposes, there were no proposed modalities on what form, shape or function entities would take to offload their pressure on state finances, he added.