Supplementary Budget 2020

Ramaphosa: Our finances are constrained, we will have to make difficult choices

SA's public finances are constrained and government will have to direct resources to programmes with the greatest impact on poverty alleviation, job creation and economic growth, President Cyril Ramaphosa said.

The president was addressing the National Assembly on Thursday, as part of his replies to issues raised by MPs during the State of the Nation Address debate which has taken place over the past three days.

"We are at a moment in our history where we need to make difficult choices. Our public finances are constrained, we will hear this more clearly when Finance Minister Tito Mboweni announces the budget," he said.

The finance minister will announce the National Budget on February 20.

Ramaphosa said that Eskom will need assistance from government to stabilise its finances.

"Doing so means stabilising the economy of the country," he said.

This comes at a time when public finances are constrained, so financial support must be accompanied by a "credible, far-reaching" turnaround plan by Eskom which has both an immediate and "lasting impact", he said.

The department of public enterprises told the oversight committee that Eskom's R420bn debt represents 15% of the country's debt. If it defaults, it will threaten the SA economy.

Speaking more broadly on the country's finances, Ramaphosa said that SA's capacity to borrow is extremely limited".

"It is necessary for us to prioritise and create trade-offs. We must direct resources to programmes with greatest impact on poverty alleviation, job creation and economic growth," Ramaphosa said.

He acknowledged requests from MPs to "trim the fat" and "reduce expenditure that is not essential" and cut down on "wastage and uncontrolled spending". "Simply put we need to be efficient in the use of our financial resources."

"We are determined and committed to get value for money, through better systems, improve productivity and consequences for non-performers," he said.

ZAR/USD
17.15
(-0.94)
ZAR/GBP
22.04
(-0.60)
ZAR/EUR
20.03
(-0.76)
ZAR/AUD
12.15
(-0.63)
ZAR/JPY
0.16
(-0.56)
Gold
1881.00
(-0.04)
Silver
23.60
(-0.56)
Platinum
877.00
(-0.34)
Brent Crude
42.88
(+1.08)
Palladium
2249.00
(+0.35)
All Share
54645.41
(-0.13)
Top 40
50469.67
(-0.22)
Financial 15
9860.71
(-0.72)
Industrial 25
73852.37
(-0.19)
Resource 10
54330.79
(-0.07)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1379 votes
It depends on how the funds are used.
73% - 8931 votes
No. We should have gotten the loan elsewhere.
16% - 1977 votes
Vote