Finance minister Enoch Godongwana has warned that South Africa has some tough financial decisions to make.
Finance minister Enoch Godongwana has warned that South Africa could run out of money by March unless government reigns in its spending.the Kgalema Motlanthe Foundation’s annual Inclusive Growth Forum, Godongwana said budget cuts would initially not be too severe as he would increase borrowing.“What has happened to public debt? It’s about R4 trillion, it’s massive,” he told delegates.
“In this environment, our ability to service that debt is becoming constrained, and therefore, we’ve got to do something about it.” “Parallel to that, expenditure is growing. I’m losing revenue on this side; expenditure is growing that side. I’ve got to find a balance.”“We are becoming poorer if you look at GDP per capita,” he said.
“Accordingly, the NEC encourages the government to continue with the implementation of structural reforms, particularly in the areas of energy and logistics.” Simultaneously, many of South Africa’s failing state-owned entities are seeking bailouts, including the SABC and the Post Office. The report said Godongwana met with National Treasury and the Reserve Bank to discuss the implications of drawing from the account.
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