Politics

Minister Mboweni in tight space over MTBPS

PRETORIA, South Africa – Finance Minister Tito Mboweni is riding the storm with political parties calling on him to stick to his guns and cut spending in the wake of the impact caused by Covid-19.

Mboweni will on Wednesday present the Medium Term Budget Policy Statement and is facing a tough situation with rising unemployment and demands for government interventions.

On Saturday the DA, Cope and the UDM said Mboweni has very little room to manoeuvre over the reduction of the size of the cake.

They said the increase in debt service costs, unemployment, health and education are putting pressure on the fiscus.

The government is facing challenges of fixing the infrastructure, increasing unemployment and ailing State-Owned Entities.

Cope spokesperson Dennis Bloem said unemployment was a major challenge facing the state.

“Unemployment is the second biggest enemy after Covid-19. We don’t know what are they going to do with the R350 grant after December. After January what are they going to do,” said Bloem.

This was in reference to President Cyril Ramaphosa’s announcement last week they will extend the R350 grant for another three months.

Mboweni has said this will cost another R6 billion and the government will have to reprioritise in departments to find the money.

DA MP and its spokesperson on finance Geordin Hill-Lewis said the issue of the stabilisation of the debt was important.

The government has over the years saw the increase in debt and it was now more than R3 trillion and debt service costs are R220 billion a year.

Mboweni has said for the country to stabilise its debt must be 30% of GDP. South Africa’s debt was over 50% of GDP.

UDM leader Bantu Holomisa said it remained unclear where government will get the money from after Ramaphosa presented his economic recovery plan.

He said already before the coronavirus struck the country there were no funds in the fiscus, but it was not clear where the money will come from.

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