REACTIONS: Analyst gives thumbs up to Mboweni's bid to get debt under control
Finance Minister Tito Mboweni delivered the Medium-Term Budget Policy Statement in Parliament today.
He revealed that the country was in fact deeply indebted, the economy is shrinking, and the government is borrowing at a rate of R2.1 billion per day.
The debt level is now sitting at 81,8% of GDP this year, up from 63,3% in 2019/20. Debt to GDP ratio to rise to more than 95% in 2025/26. The Finance Minister likened the economic situation to the gaping mouth of a hippo.
There is a very big focus on getting the debt under control and I think that’s important the first step in solving the problem is admitting there is a problem.Izak Odendaal, Investment Analyst - Old Mutual Wealth
The work towards getting debt under control is going to be on the spending side and not on the tax side, although there are plans for some tax increases the burden is not going to fall on the taxpayer but rather on the public-sector employees in the sense that the government is proposing a wage freeze in the next 3 years.Izak Odendaal, Investment Analyst - Old Mutual Wealth
Mboweni has mentioned that the Budget Facility for Infrastructure will support new projects through blended finance partnerships with the private sector.
We are encouraged that the president and the minister of finance are committed to infrastructure investment.Lumkile Mondi , Senior Lecturer at the School of Economic and Business Science - Wits University
We encourage the government to really look at partnering with the private sector and really sticking out the promise and commitments of the investment program.Lumkile Mondi , Senior Lecturer at the School of Economic and Business Science - Wits University
The minister also spoke of the tax:GDP ratio, saying it is likely to bounce back to the 2019/20 level by 2027/28 and the Tax Revenue will decline this year by R312.8 billion.
I think the main thing is they need to make sure they empower the tax authorities in other words the South African Revenue Services by making sure the people there are well skilled and will be able to unpack most of the transactions so if they can focus on that without changing anything the legislation, I think they can go a long way.Zweli Mabhoza, Founder and director - Priority Tax Solutions
Whatever legislation that will be placed now, the impact of that will be felt in two or three years.Zweli Mabhoza, Founder and director - Priority Tax Solutions
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