BUSINESS MAVERICK WEBINAR: SA’s debt tale of woe: After the squandering, sovereignty in the balance without reforms

South Africa has a debt conundrum. The economy was already saddled with a heavy debt burden — with much of the money that was borrowed siphoned off, squandered and misspent — and was stuck in the rut of recession before the Covid-19 pandemic pushed it into the abyss. Now revenue is falling just when a fiscal stimulus is needed the most. The budget deficit is on course to exceed 15% of gross domestic product and overall debt is set to swell to a level beyond 80% of GDP.

Moola noted that there was a time when South Africa could have turned on the fiscal taps to help stimulate growth. The problem is that much of the money went down the patronage drain. This gets to the heart of the matter. Growing debt with brisk economic growth, which in turn lifts government revenue, is sustainable. Without growth or policies to promote growth, it becomes a fiscal burden. And it leaves you short of options when the going gets really tough.“I think we have managed not to spend our way out of trouble. If you look at the fiscal response we have had , it’s been modest. And the modesty of the response is a function of our fiscal state pre-Covid.

“We have not spent a great deal more, but we are still going to have one of the largest budget deficits in the world this year . And that tells you the position we came into this crisis in … Spending is useful when you have pipes that can efficiently disperse the money. The social welfare grants are the best piece of spending we did. The PPE has been atrocious and just highlights the inability of government to actually disperse money efficiently and honestly,” Moola said.

Belgique Dernières Nouvelles, Belgique Actualités

Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.

Business Maverick: Robinhood Probed by SEC Over Payments From High-Speed TradersRobinhood Markets faces a U.S. regulatory probe into whether the firm properly informed brokerage clients that it sold their stock orders to high-frequency traders and other Wall Street firms, according to a person with direct knowledge of the matter.
La source: dailymaverick - 🏆 3. / 84 Lire la suite »

Business Maverick: Seven Nobel Winners Sign Letter Opposing Shelton Fed NominationA group of more than 100 prominent economists, including seven Nobel Prize laureates, have signed a new open letter to U.S. senators urging them to reject President Donald Trump’s nomination of Judy Shelton to the Federal Reserve’s Board of Governors.
La source: dailymaverick - 🏆 3. / 84 Lire la suite »

Business Maverick: Cartoon Thursday with RicoDefend Truth
La source: dailymaverick - 🏆 3. / 84 Lire la suite »

Business Maverick: Tesla Share Price Has Gone MadBlunders with Paul Theron from Vestact
La source: dailymaverick - 🏆 3. / 84 Lire la suite »

Business Maverick: Yum China Guides Hong Kong Listing Price at HK$412 EachYum China Holdings Inc. is telling prospective investors it plans to price its second listing in Hong Kong at HK$412 per share, putting it on course to raise HK$17.3 billion ($2.2 billion), according to people familiar with the matter.
La source: dailymaverick - 🏆 3. / 84 Lire la suite »