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Treasury: Economic growth will be done by the book

Aug 13 2018 22:20
Khulekani Magubane

Any plans government considers to stimulate economic growth will be above board and go through the necessary channels, National Treasury insisted on Monday. 

In a statement, Treasury addressed skepticism around proposals including a sovereign wealth fund, which would be an investment pool made up of money from the country's reserves.

Critics have called for clarity on how such a fund would be supplied, saying it would need billions in order to function.

Any plans implemented would be funded by "the re-prioritisation of existing budgetary resources", Treasury said, saying further details were not yet available.

But, the statement added, any plans implemented would be consistent with executive guidelines.

'Fiscal prudence'

City Press reported over the weekend that the ruling African National Congress was looking to have a sovereign wealth fund established ahead of the next term of government, as part of its campaigning plan for 2019's national election. Although queries went unanswered, it appeared the party was looking at using mining and energy resource royalties to establish the fund.

Opposition Economic Freedom Fighters chief whip Floyd Shivambu also said he supported such a plan.

Business Day, meanwhile, reported that a stimulus plan President Cyril Ramaphosa raised during last week’s Cabinet lekgotla could cost as much as R43bn.

In its statement, Treasury said plans Ramaphosa proposed to stimulate economic growth would be considered, scrutinised and implemented by the book.

"In his statement to the nation on July 31, President Cyril Ramaphosa made it clear that the funding for measures being considered to ignite economic growth would be done in a manner that ensured that government maintained fiscal prudence," the statement said.

The statement added that consideration of the funding for any measures would be undertaken via the normal budgetary processes, through presentations of recommendations by National Treasury to the Ministers' Committee on the Budget.

The Ministers’ Committee on the Budget is a Cabinet subcommittee chaired by the Minister of Finance, Nhlanhla Nene.

The committee on the Budget deliberates and then makes recommendations to Cabinet.

"The measures that are being considered for igniting economic growth will be funded through the re-prioritisation of existing budgetary resources.

"Further details on these measures will be announced by the president in due course," the statement said.

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