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Finance Minister Tito Mboweni said on Friday that he would present a revised budget to Parliament that would accommodate the R800 billion government response to the Covid-19 coronavirus pandemic.
“I will soon be presenting a revised budget bill to Parliament to address all of these measures,” Mboweni said at a press conference. He did not specify a date.
Earlier in the week, President Cyril Ramaphosa announced the R500 billion coronavirus relief package, which included stimulus funds, salary coverage allocations, and tax incentives for companies affected by Covid-19 and the shutdown.
Mboweni said the aid package, combined with monetary policy measures by the Reserve Bank of South Africa, such as cutting 200 basis points in interest rates in less than a month, could unlock up to R800 billion in the economy.
Without detailing the strategy in depth, Mboweni said the national budget he presented in February would undergo a budget reallocation and reprioritization to ensure that funds are redirected from nonessential state functions to government interventions to the coronavirus.
Tourism cuts
“It is very clear that, over the next time, there will not be much tourism for a while. Therefore, there would be no point in allocating funds for tourism during a period when tourism is not occurring.”
“We will do our best to remove from the budget all the items that can be postponed. All the programs that can be postponed will be postponed, and we are redirecting that money to these initiatives,” Mboweni said.
When reporters asked Mboweni to clarify access to loans from the international community, such as the International Monetary Fund, Mboweni said South Africa had the right to access emergency funds from lenders to combat the coronavirus.
‘Make a molehill mountain’
“I think we are trying to make a mountain out of a grain of sand. The fact is that we are members of the IMF and the World Bank. We pay them our subscriptions and we have the right to approach these organizations,” he said. .
Mboweni said the issue of the Reserve Bank printing money and putting it into the system did not immediately arise, as the government was concerned about introducing other measures.
Economist Thabi Leoka said the minister’s speech was sparse in detail and that he hoped Mboweni would fully unpack the prioritization of funds and the targeting of financial measures.
“It did not add much to what the president said. He expected more granularity regarding allocations and the R500 billion. He expected him to mention if this was enough or if there would be more need,” Leoka said.
Leoka said that redirecting funds from non-urgent state functions was a good initiative, as there were government programs that were unnecessary and did not produce the expected results.
