Minister Enoch Godongwana
Mr Godongwana was appointed in August and faced a daunting inbox. Prior to the pandemic, the economy was stuttering, and the economic dashboard was flashing ominous warnings from high twin deficits to debt-service costs crowding out spending that otherwise could be directed for example to education, health and infrastructure.
South Africa also entered the pandemic in a technical recession, and the country lost its remaining investment grade credit rating shortly thereafter. Notwithstanding, increased spending was unavoidable, as the government sought not only to flatten the curve but provide relief to South African citizens and businesses as they weathered a once-in-a-century viral storm. A higher fiscal deficit, necessary in the short term, is unsustainable, all things being equal, in the medium-to-long term.
Tough policy and fiscal choices are required. Ideological differences and ruptures in the ruling alliance make balancing the country’s finances over the short-to-medium term particularly challenging. The stakes remain high, given the pressing need to address intolerable levels of poverty, unemployment and inequality, all in a fiscally sustainable manner.
The finance minister delivered a medium term budget policy statement (MTBPS) in early November, which will provide insight to the state of the country’s finances and the direction of travel of tax and spending plans in the lead up to the tabling of his maiden budget in February 2022.
During this Corporate Network briefing, we’ll engage Mr Godongwana on the MTBPS and probe his priorities particularly in relation to the implications for the commercial sector over the near-to-medium term.