Finance Minister Enoch Gadaghwana says the National Treasury is reviewing the country’s macroeconomic policy. Gadagwan said in parliament during a virtual vote on the budget on Wednesday that there is a need to improve the country’s public finances.
The review will examine how some of the key economic indicators have evolved, and assess policy implementation.
The minister said the National Treasury would work with government departments to implement the reconstruction and recovery plan.
The National Treasury has told parliament that the country’s economic situation remains uncertain.
And while South Africa is on the path to economic reconstruction and recovery, the COVID-19 pandemic, among other factors, continues to create global uncertainty.
All of this is happening at a time when South Africa is facing many systemic problems of inequality, poverty and unemployment.
Expenditures on the country’s debt service account for 34.4% of the Department’s budget over the medium term.
“For the National Treasury, this will require determined efforts in our ongoing efforts to accelerate economic growth, including tackling structural constraints, implementing measures to restore investor confidence and public confidence, maintaining fiscal structure, reducing policy uncertainty and reducing the cost of doing business.”
Finance Minister Godagwan says the Treasury is reviewing SA’s macroeconomic policies:
Godogwana says the National Treasury is working to restore public finances that remain strained.
“The National Treasury will continue to support the government’s ability to ensure stable, sustainable growth and a fair and efficient allocation of public resources. We will continue to pursue a balanced and prudent fiscal strategy to stabilize public finances. Although public finances remain under some pressure, the fiscal position has improved somewhat compared to last year. We cannot weaken, because we are still in the process of restoring the health of public finances. “
The Minister reiterated his position on reducing state guarantees to state-owned enterprises. But he says the finance ministry is exploring ways to repay Eskom’s debt, which currently stands at about 300 billion rupees.
“The government will continue to finance gross borrowing while minimizing refinancing risks, currency risks and total borrowing costs. To reduce their ongoing needs for South African public resources, the National Treasury will define criteria for public funding of the social sphere. Eskom is facing a large amount of debt, which remains a challenge to service without assistance. The National Treasury is working on a sustainable solution to deal with Eskom’s debt fairly and equitably to all stakeholders. Work is underway to revise management systems in a number of high-risk state-owned entities. “
The National Treasury says it supports the government’s plan to combat the inefficiency and high cost of utility bills such as electricity, water, transportation and telecommunications.
It says these costs run counter to the state’s goal of improving the ease of doing business in the country.