South Africa could be 'junk' by Friday - Investec
Finance Minister Tito Mboweni warned that South Africa's government debt could hit more than 70% soon.
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30 Oct 18:31
Investec economist Annabel Bishop says the mid-term budget's "extreme ramp-up" in debt-to-GDP projections makes a Moody’s credit
rating downgrade substantially more likely.
The current budget deficit is now at 5.9% of GDP, compared with 4.5% last year. It is now expected to rise to 6.5% next year.
The national debt now tops R3trn and may grow to R4.5trn by 2022/23 – or 71.3% of GDP. It is currently at 61% of GDP.
Moody's is the only one of the credit rating agencies that still reckons South African government bonds are investment grade. If it also downgraded South Africa to junk, South Africa will pay much more on government bonds.
"It will be a close call whether the outlook drops from stable to negative on SA’s dual currency long-term sovereign debt Moody’s rating, or if an actual rating downgrade occurs."
30 Oct 17:32
Deputy EFF leader Floyd Shivambu says there is nothing new in Finance Minister Tito Mboweni's mid-term budget.
Speaking to journalists on the steps of Parliament after Mboweni delivered his address, Shivambu said the finance minister "ignored" that the structure of the South African economy had to fundamentally change
Shivambu said Mboweni should rather have talked about reindustrialisation and strategic import substitution, adding the mid-term budget was characterised by "neo-liberal drivel".
30 Oct 17:25
Treasury has warned that while South Africans have been hit with large tax hikes over recent years, even more taxes are being considered to boost state coffers.
“Significant tax increases over the past several years leave only moderate scope to boost tax revenue at this time. Given the size of the required adjustment, however, additional tax measures are under consideration,” Treasury said in its mid-term budget policy statement on Wednesday.
30 Oct 16:25
The finance minister has given South Africans an
"optimistic road forward" under "difficult circumstance,"
according to Pravin Gordhan.
The minister of public enterprises was commenting on his
Cabinet colleague's medium-term budget policy statement at Parliament.
"I think what we need now is hope and confidence, investment
and the creation of jobs," said Gordhan, who has twice served as minister
of finance. "And if all of us work together
– unions, government, business and the communities, we can make it happen".
On Tuesday Gordhan published
ths state's long-awaited Eskom policy roadmap for Eskom, which includes completing
the unbundling of its generation, transmission and distribution operations by
30 Oct 15:29
When Finance Minister Tito Mboweni presented his maiden budget in
February, he brought a hardy aloe plant to Parliament and placed it on
his lectern. The plant indicated that SA needed to ready itself for hard
On Wednesday, when he presented his second
medium-term budget in Cape Town, he gave an update: the aloe was not
doing well. "It needs attention, like our public finances," he said,
according to his prepared remarks.
"Our problem is that we spend more
than we earn. It is as simple as that."
30 Oct 15:26
Minister of Finance Tito Mboweni announced on Wednesday that cabinet members and other politicians may face salary cuts.
Mboweni had announced proposals including early retirement,
reorganisation, salary freezes and the reduction of bonuses to keep
public service spending in check in his February budget, he said on
Wednesday that these had "not realised as much savings as we hoped".
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30 Oct 15:24
Government will help struggling national carrier South African Airways
(SAA) repay its R9.2bn in government-guaranteed debt over the next three
years, Minister of Finance Tito Mboweni announced on Wednesday when he
tabled his second mini budget.
30 Oct 15:20
Despite speculation that Finance Minister Tito Mboweni would make an
announcement on reducing Eskom's R450bn debt burden, the minister said
on Wednesday that the power utility's management has yet to show
progress on reforms.
30 Oct 15:09
Minister of Finance Tito Mboweni gave a sobering forecast of a shortfall
in tax revenue collections, saying that Treasury expected to collect
R1.37trn this year, about R52.5bn less than its projection in the
30 Oct 15:01
Mboweni concludes his speech by wishing the Springboks well in the Rugby World Cup.
"May I wish the Springboks all the best this weekend."
30 Oct 15:01
"The Bank is a strange creature of statute – even though we do not own it, the National Revenue Fund receives 90 per cent of the profits, after provisions ordinarily made by bankers."
30 Oct 14:57
Mboweni: "Government has made progress on a blended finance Infrastructure Fund. The Fund will be hosted by the Development Bank of Southern Africa. A pipeline of possible projects amounting to more than R500 billion has been identified."
30 Oct 14:54
Through reprioritisation, the NPA will get an additional R1.3bn and SARS and additional R1bn for the next two years.
"These funding shifts will bolster efforts to combat corruption and improve revenue collection," says Mboweni.
30 Oct 14:51
Mboweni: "Once I am convinced that the Eskom Board and Management has made an irrevocable commitment to implement government’s decisions and there is enough progress, we will negotiate the appropriate size of debt relief. Eskom is a business and should be run that way."
30 Oct 14:50
"Going forward, new cash flow support will no longer be equity but will be in the form of loans," Mboweni says.
30 Oct 14:46
In sending "a message" to state-owned companies, public entities and the private sector, Mboweni announced that salaries will be frozen for Cabinet members, premiers and MECs.
The is a likelihood of downward adjustments too, Mboweni adds.
Costs of officials cars will be capped at R700 000 and cellphone dispensation will also be capped.
All domestic travel will be on economy class.
30 Oct 14:38
"On our current trajectory, by the end of the three-year framework, debt service costs will be bigger than spending on health and economic development," says Mboweni.
30 Oct 14:37
involves difficult decisions that imply sacrifices by all of us. Slowing growth
in the compensation bill and additional revenue measures will be needed.
consequences of not acting now would be gravely negative for South Africa. Over time, the country would likely face mounting debt service costs and higher interest rates and may enter a debt trap," says Mboweni
30 Oct 14:34
the national debt exceeded R3 trillion. It is expected to rise to R4.5 in the
next three years. Clearly, we need to do things differently.
"We spend more than we earn," Mboweni says.
30 Oct 14:28
"Cabinet has approved that we implement the findings of the Nugent Commission of Inquiry, and I intend to table a bill early next year.
expect to collect R1.37 trillion this year. This is R53 billion, or 4%, less
than we expected. Looking ahead, our revenue forecasts are prudent," Mboweni says.