Eskom, social grants among issues expected in Godongwana's maiden budget

Eskom, social grants among issues expected in Godongwana's maiden budget

Finance Minister Enoch Godongwana will on Thursday table his maiden Medium Term Budget Policy Statement.

Finance Minister Enoch Godongwana National Assembly
YouTube: Parliament of the Republic of South Africa

He'll give clarity on the state of the county's economy, after taking over the reins from Tito Mboweni, a month after the July unrest.

Economist Duma Gqubule says it will be interesting to see if the minister decides to extend the Covid distress grants beyond March.

"The second thing that he has to do is to announce what he is going to do to grow the economy. He has an unviable economy at the moment where almost 50% of Africans are unemployed, 53% of African females are unemployed, 75% of youth are unemployed.

“We also have got a serious crisis of the economy and he has to have a vision to get us out of this crisis because quite frankly, over the past few years, we haven't had proper plans from this government on how to get us out of this crisis."

Gqubule says the minister might announce extra relief measures for cash-strapped state-owned enterprises like Eskom.

"Eskom might require emergency funding to help it with the maintenance budget. I think right now the major issue in the economy is Eskom. I think we would all appreciate some kind of assistance to Eskom to solve the problems that it has, whether it is operational or finance.

“Right now, we don’t care, we want the lights on because it has a huge impact on the economy and we shouldn't just look at the short term costs of providing assistance to Eskom. We must look at the long term damage that Eskom is causing to our economy."

Economist Dawie Roodt says the finance minister should not withhold the truth about the financial state of the country when he tables his mini-budget.

"He will still have to tell people that the state is basically bankrupt, that the state simply does not have the financial capacity to support people the way we sometimes expect the state to support us.

"That of course in a way will include the performance of Eskom because the economy and economic growth really depend on the performance of Eskom and I also think that the minister will allude to the fact that we have very high levels of unemployment and we need some sort of social security nets in order to catch those individuals that are not looked after in the South African economy, so there's the possibility of the introduction of or the extension of some of these grants." 

The mini-budget speech will be delivered at 2pm.

New Newswatch podcast banner yellow

Show's Stories