There will be lots of pressure on the new finance minister to say the right thing about the economy at the MTBPS.
Finance Minister Enoch Godongwana must show government’s will to revive the economy and make doing business easier when he delivers the medium-term budget policy statement in parliament on Thursday afternoon. South Africans are holding their breath to see if he will at least offer some kind of hope for economic growth, and according to economists, the only way to do this will be to make it easier to do business in the country.
He does not expect any major changes but says continued focus on what will support growth is important because of the significant challenges the economy still faces. The electricity shortages plaguing the country continue to curtail businesses while the fuel price increases will add real pressure to inflation.
“The continued focus on fiscal discipline to reduce the deficit and debt servicing cost is another matter that will weigh heavily on the minister’s thinking, while there is some good news that revenue collection is improving.” Another important factor is measures directly related to consumers, which should focus on how to continue providing relief from the ravages of the pandemic.
Angelika Goliger, chief economist at EY Africa, says while Treasury and the Presidency are focused on tackling big-ticket constraints in the energy, transport, water, spectrum allocation and communications space through Operation Vulindela, there are also numerous smaller regulations and processes that make it harder for businesses to operate in South Africa.
The minister can start with scrapping the requirement to renew your driver’s license every five years and other similar quick wins.
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