South Africa and the world at large have their eyes set on the country’s Finance Minister Tito Mboweni who will take centre stage today when he delivers the Medium-Term Budget Policy Statement (MTBPS).
It is just a little over two weeks since the former Reserve Bank governor was appointed after Nhlanhla Nene stepped down. Mboweni is respected both within government and the markets but according to economists in the country, the challenges he faces are enormous.
Just two weeks after being sworn in, many are looking to Mboweni for direction and reassurance as the country grapples an economic recession. South Africans have been under pressure with rising fuel prices, VAT increases and the general cost of living rising at a rapid pace.
While Mboweni had little say in the crafting of the actual policy statement, his dramatic return from political exile was hailed by the markets and many within government.
But taking over at Treasury is likely to have been a more sobering experience, given the state of the economy and the country’s finances.
Mboweni will today spell out the government’s spending plans for the next three years and is expected to detail efforts to contain spiralling government debt and a civil service wage bill that is running out of control.
Wits University’s head of the School of Economic and Business Sciences, Professor Jannie Rossouw says: “As finance minister, having been appointed about two weeks before the MTBPS, only marginal changes to the speech can be made, not to the numbers. We will only see the real impact of the Mboweni effect in the main Budget in February next year and then, of course, next October in the MTBPS for the next three-year period.”
However, as Tito Mboweni prepares to deliver his maiden medium-term budget policy in the National Assembly today‚ the South African Federation of Trade Unions (Saftu), says it believes nothing new will come from the newly-appointed finance minister.
“Saftu has no confidence that the finance minister’s first medium-term budget speech (MTBPS) will do anything other than deliver another budget like those of all his predecessors – dictated by big business‚ international financial institutions‚ the credit ratings agencies and the pro-capitalist media‚” general secretary Zwelinzima Vavi said on Tuesday.
Vavi said that as an organization, they feared Mboweni’s speech would fail to acknowledge that the country had one of the world’s highest unemployment rates.
He further added that the union wanted radical changes from Mboweni.
“His speech will give him the opportunity to reverse a succession of austerity budgets which are making an already horrendous situation for the majority of South Africans even worse.”
The former central bank governor was appointed as finance minister on October 9 2018 following Nhlanhla Nene’s resignation over his meeting with the controversial Gupta family. Mboweni is expected to deliver the budget speech against the backdrop of an economy which is currently in a technical recession.
The Congress of South African Trade Unions (Cosatu) said that there would be “no honeymoon” for Mboweni as he is faced with a huge task ahead of him.
Earlier this week, there was a huge response to a tweet by Mboweni calling for input on his MTBPS. The minister called for ideas for the budget and thousands of people responded.