Eskom debt, relief grants and climate finance may blow up the fiscal position

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A basic income grant that is funded by debt will lead to a fiscal crisis in five years, says Isaah Mhlanga 🔒

Markets, investors and credit ratings agencies will keep a close watch on finance minister Enoch Godongwana as he announces the tough choices made on Eskom debt, the social relief grant and the details of climate financing at the medium-term budget policy statement next week.

Alexforbes chief economist Isaah Mhlanga said these three issues will determine the country’s fiscal position and its debt level over the medium term as well as reaffirm the country’s credit rating...A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and TimesLive Premium.

 

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Not necessarily. UBI is pro-growth. It functions as capital and buying power, and it enables entrepreneurs to thrive, and workers to upskill and be more productive. It's entirely possible for some amount of deficit-financed basic income to pay for itself in a larger economy.

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