Budget 2023
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Sacci sees govt tightening belt more

Johannesburg - Expect further containment of government spending in Minister of Finance Nhlanhla Nene's mini budget, according to the South African Chamber of Commerce and Industry (Sacci).

"Prudence at national, provincial and local levels, and further commitment to ensuring that there is optimal value for public spending, may bring some stability and a more substantial platform on which future economic growth may be promoted," said Sacci president Vusi Khumalo.

"Business and investors require political stability and a predictable environment in which they may operate.

"Just like in his mini budget speech a year ago, Nene might very well talk of a turning point for the economy yet again, for, if anything, there has been some turn for the worse and those deficiencies of the economy which exercised his mind then, remain prevalent."

Khumalo warned that the threat of a further decline in South Africa’s credit rating looms, while the unfavourable foreign exchange rate, "an indifferently-performing" industrial sector and the level reached by Sacci’s Business Confidence Index (BCI), are all signs that the projected growth rate will be much on a par with, if not worse than, the 1.4% to which the minister referred last year.

SA’s potential for economic growth remains solid, according to Khumalo, but for this to be realised, more attention must be paid to the fundamentals of growth. These include the attraction of investment and a regulatory and state policy framework which enables, rather than obstructs.

"Of these, the legislation introduced to control visas and immigration is the most notable for having undermined the tourism economy. At the same time, more efficient delivery will diminish the number of incidences of social and labour restlessness which cast the country into a bad light," he said.

"The economy will not come right on its own. It requires a focused drive on the part of government to stimulate the private sector by ensuring that the business environment is as free from encumbrances as possible so that a momentum of investment is initiated and investors may expect good returns."

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