South Africa: Mboweni's Emergency Budget Is About Survival

Established in a City of Cape Town-owned community sports centre, the Khayelitsha Field Hospital will function as an extension of the adjacent Khayelitsha District Hospital, essentially expanding its capacity to treat moderate to severe COVID-19 cases.
analysis

Finance Minister Tito Mboweni is scheduled to deliver an emergency Budget on Wednesday 24 June. The Budget he tabled in late February is now extinct, and this one will be a blueprint for survival as the economy, and with it, the government's main sources of revenue, melt down in the face of the Covid-19 pandemic and the lockdowns to contain it.

With the winter solstice behind us, the days are lengthening again in an annual cycle of renewal. But don't expect any rays of sunshine in Finance Minister Tito Mboweni's emergency Budget.

One certainty is that the numbers will change, and for the worse.

Four months ago, National Treasury -- in a Budget that now reads like a dusty historical relic on display in a museum -- was forecasting the economy would grow 0.9% in 2020 with a budget deficit of 6.8% of gross domestic product (GDP). The debt-to-GDP ratio was seen rising to 71.6% by 2022/23 from 61.6% in 2019/20.

Those numbers are now effectively meaningless. The small growth forecast will be replaced by a contraction forecast that will be nothing short of massive. The South African Reserve Bank (SARB) forecast is for a 7% shrinkage,...

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.