Mboweni’s tough budget task laid out in charts
A look at what the Finance Minister faces when he presents the country’s third set of budget plans this year on Wednesday.
Finance Minister Tito Mboweni will have to balance finding money to help Africa’s most-industrialised economy recover from its longest recession in three decades, bail out state-owned companies and fund civil servants’ pay increases with pledges to rein in government debt and shrink the budget deficit.
These charts show the tough task Mboweni faces when he presents the country’s third set of budget plans this year on Wednesday.
Lockdown measures to curb the spread of the virus weighed on revenue collection and the forecast for the consolidate budget deficit for the year through March 31 could now be even wider than the 15.7% of the gross domestic product that Mboweni projected in the June supplementary budget.
Debt as a percentage of GDP will peak in 2024, but that’s in the Treasury’s best-case scenario, where the government takes active steps to stabilize the trajectory and revive the economy. The cost of servicing the country’s loans has been the fastest-growing expenditure item since 2011 and is forecast to climb even further. While the cabinet backs Mboweni’s plans to target a primary budget surplus by 2023-24, any austerity measures are likely to face opposition, including from politically influential labour groups.
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