Thankfully, Moody’s Investors Service responded by only changing South Africa’s outlook to negative and left the country’s sovereign credit rating untouched.The dust has settled on the MTBPS and the market has done its thing. But there are two key messages from Finance Minister Tito Mboweni’s package of presentations that got little to no traction, which warrant revisiting.
During the pre-MTBPS briefing with journalists, Mboweni pointed out that, since its inception 22 years ago, “no thorough review of [its] successes and failures” had been conducted. “We have to re-evaluate this thing. Certain things are relevant in specific times and become irrelevant in other contexts.”
Mboweni was at pains to clarify the MTBPS is not a “mini-budget”, but merely a conversation-starter around policy issues in the build-up to the February Budget. Perhaps the seed will fully germinate in the February Budget about which way the MTBPS will go. The cost-saving initiatives he announced in the MTBPS, specifically the one relating to domestic air travel, represented quite a coup for Mboweni. Indeed, the finance minister has decreed that public servants in all three spheres of government must use economy class when travelling domestically.Nothing compels public representatives to use SAA, they can shop around,” he said. However, the National Treasury “can’t decide for Parliament”.
SAA is the holding company for SAX. The flagship airline also holds a 5% stake in regional carrier South African Airlink.
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