This year’s Medium-Term Budget Policy Statement (MTBPS) will be presented on October 30, 2024 and plays an important role by providing a mid-year review of South Africa’s fiscal performance.
The speech informs South African if the targets that government set in the February Budget have been met and what needs to be implemented in the coming year.
The statement also recalibrates the Medium Term Expenditure Framework (MTEF), offering insights into shifting priorities and the impact of government’s fiscal planning, according to Casey Sprake, an investment analyst at Anchor Capital.
This year’s MTBPS is being presented amid a moderately improved economic outlook and the establishment of the Government of National Unity (GNU).
Business sentiment is rebounding as political and policy uncertainty ease, according to Nedbank’s Economic Review.
The bank said that government’s focus is firmly on service delivery, with the crowding-in of the private sector in the large infrastructure projects being prioritised.
So what should South Africans be looking for during the statement?
Sprake noted that there are several items that Finance Minister Enoch Godongwana needs to discuss on Wednesday.
Sprake’s wish list:
A credible plan that brings debt accumulation under control.
A demonstration of additional measures to improve the ease of doing business in SA.
A credible turnaround plan for Transnet.
Further details surrounding potential liabilities of the Road Accident Fund (RAF), as well as other SOEs, which are currently in distress, including Denel, the Land and Agricultural Development Bank of SA (Land Bank), the SA National Roads Agency (Sanral).
Detailed plans to address the financial distress of municipalities nationwide and the subsequent debt relief measures required.
Turnaround plans for SA’s failing water boards — municipalities that owe the water boards R21 billion are also seeking debt relief.
Clarity surrounding the future of the Social Relief of Distress (SRD) grant.
Clarity around the proposed NHI and the required funding sources.
An update on SA’s progress towards exiting the Financial Action Task Force’s (FATF) grey list.
“Overall, reining in new expenditure pressures is key, as is making savings, avoiding wastage, inefficiency, and inappropriate spending, focusing on economic growth-creating initiatives, and spurring the rapid repair of the electricity sector,” Sprake said.
She noted that while the economic outlook is improving, driven by reduced political uncertainty and strong fundamentals, structural challenges, particularly in logistics, continue to pose risks to growth.
“Looking forward, achieving more robust economic growth will rely on the effective implementation of structural reforms,” Sprake noted.
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