In presenting the emergency budget, finance minister Tito Mboweni did the country a service by highlighting the scale of South Africa’s fiscal malaise. With a budget deficit close to 15% of GDP and a sovereign debt crisis looming, this is a matter that threatens South Africa’s future.
It is important not to lose sight of how South Africa ended up here. The growing gap between revenue and expenditure was aggravated by the public health emergency, but was not caused by it. The current crisis has been a decade in the making, expressed in lethargic growth, poor management of the state and its resources, and a policy environment that has been dissuasive to investment.
Of these, policy is firmly within the purview of government. But the intention is to push ahead with such measures as Expropriation without Compensation and with more intrusive racial engineering (‘BEE is here to stay’, President Ramaphosa said the other day). Even the toxic practice of cadre deployment will continue.
In other words, as South Africa reels under a fiscal crisis – and the broader economic crisis around it – there is little indication of any appetite for the reforms necessary to extricate itself. The finance minister has called for ‘structural reforms’. But until this is accepted by his colleagues in government, South Africa is at risk of disaster.
Terence Corrigan
Project Manager, Institute of Race Relations
