President Cyril Ramaphosa and finance minister Tito Mboweni. Picture: ESA ALEXANDER
That first midterm budget policy statement on October 24 2018 would have been largely completed long before anyone knew that Mboweni would be delivering it, so it is rightly not regarded as his. It has been followed by one other and two full budgets of his own. “Give or break” or “last chance” and similar expressions were common before Mboweni unveiled his last budget just four months ago. Then, the biggest problem was whether the government would be able to produce a credible budget with a plan on how to deal with the country’s spiralling debt.
When one looks at the numbers that have already been leaked — a budget deficit of more than 14% in 2020/21 and a debt-to-GDP ratio of more than 100% in less than a decade — it’s hard not to be filled with dread. While nobody could have foreseen the Covid-19 disaster and its impact, the fiscal crisis predates it and the country had shown little urgency in dealing with it.
The credit guarantee scheme that was agreed with the banks was supposed to account for R200bn of that. From what we know so far, the take-up has been barely 1% of that. While this might not be on Wednesday’s budget, the government needs to move fast on this or risk large-scale business failures.