BLSA: Gigaba's MTBPS is scary

BLSA CEO Bonang Mohale says that government is running out of money and should now be turning to business for help.

FILE: Finance Minister Malusi Gigaba. Picture: AFP

JOHANNESBURG - Business Leadership South Africa (BLSA) has described Finance Minister Malusi Gigaba’s medium-term budget policy statement as scary, saying that Treasury and the private sector should join hands to ensure economic growth.

Gigaba delivered his first medium-term budget policy statement in Parliament on Wednesday.

He revealed a revenue shortfall for this year of R50.8 billion and identified Eskom’s failings as a significant risk to the entire economy.

Gigba also announced a bailout totalling nearly R14 billion for South African Airways (SAA) and the South African Post Office, to be partly financed by the sale of some of government’s shares in Telkom.

Treasury figures reveal that government debt will soar to R3,4 trillion by 2020.

BLSA CEO Bonang Mohale says that this paints a bleak picture for South Africa.

“The cost of servicing this debt, he tells us it’s now 15%, which means we’re at the same level during the days of apartheid, when we were technically bankrupt. This is a classical definition of fiscal cliff.”

Mohale says that government is running out of money and should now be turning to business for help.

“The GDP growth I’m talking about can only come from the private sector and lets join hands, lets end an olive branch because business believes in South Africa and the future of this country and wants to invest.”