CAN THE NEW SOUTH AFRICAN FINANCE MINISTER’S MID TERM AND ACTUAL BUDGET SAVE SOUTH AFRICA FROM ITS ECONOMIC WOES
Journal Title: European Journal of Business and Social Sciences - Year 2015, Vol 3, Issue 10
Abstract
The paper attempts to analyze the mid – term budget of the new Finance Minister of the Republic of South Africa. The new Finance Minister has to walk a very tight rope in balancing the economic crisis that confronts the Republic, on the basis that government debt has escalated and is reaching proportions that might not be manageable in both the short, medium, and long term. This is further exacerbated by endemic corruption and a government that is out of tune with the economic realities of the country. Can the public sector splurge be halted? On the other hand there is a misplaced trust in the faith of foreign investors. South Africa exemplifies the issue of increased taxes upon the citizens of the country, while all else in the public sector fails. In reality the financial crisis in South Africa is a tight squeeze in terms of balancing the budget and the treasury faces tough choices on tax increases. It was a band aid budget and therefore the markets will wait to see if the Finance Minister can really pull it off in terms of dealing with the vexing financial issues that confront the country, including the necessity of the privatization of parastatals that show no appetite for the developmental agenda of the state. South Africa’s economic status has been again downgraded by the rating agencies and South Africans wait with bated breath to see if Standard and Poor and Fitch will do the same. South Africa’s economic status is now dangerously near junk status and this does not bode well for the South African economy and the development agenda of the state. The medium – term budget policy statement of the new Minister of Finance has not really brought about confidence within the country. The country will have to wait to see its outcomes in the months that lie ahead. However, against all odds the Finance Minister must be commended for his efforts in wanting to turn the economy around. He cannot do it alone and therefore requires the support of the Cabinet, all politicians and the bureaucracy. The paper examines a host of issues that were tabled by the Minister in his Medium – Term Expenditure Policy statement.
Authors and Affiliations
Anis Mahomed Karodia (PhD)| akarodia@regent.ac.za Professor, Senior Academic and Researcher, Regent Business School, Durban, Republic of South Africa, Paresh Soni| Paresh.Soni@mancosa.co.za Institutional Researcher, Management College of Southern Africa (Mancosa), Durban, Republic of South Africa, Stanton Thomas| researchadmin@regent.ac.za Research Administrator and MBA Student, Regent Business School, Durban, Republic of South Africa
Keywords
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