Experts label Mboweni’s Budget speech ‘too optimistic’

Outa says there were no surprises from the Finance Minister's maiden speech considering the challenges currently gripping the country's economy.

Finance Minister Tito Mboweni addressing the media prior to his Annual Budget speech taking place on 20 February 2018 in Cape Town. Pictures: Cindy Archillies/EWN.

JOHANNESBURG - Some experts say they doubt whether Finance Minister Tito Mboweni's speech has the substance to attract investment to the country.

Wits University economics lecturer Lumkile Mondi says no long-term plan was given on how to get around the country's structural issues.

“It’s a Budget that really puts the country on a potential downgrade by Moody’s because it has no growth-supporting mechanisms at all. The focus on cutting expenditure for the public sector by R27 billion does not address the critical issues around the wage bill of the public sector.”

Economist Dawie Roodt feels Mboweni delivered a budget that's too optimistic.

“The numbers are actually quite negative and I believe that most of these numbers are totally overly optimistic and I don’t think those numbers will be achieved.”

Meanwhile, the Organisation Undoing Tax Abuse (Outa) said it cautiously welcomes Mboweni's reforms.

Outa says there were no surprises from the finance minister's maiden speech, considering the challenges currently gripping the country's economy.

CEO Wayne Duvenage said Cabinet needs to implement tight restrictions on state-owned enterprises.

“There is a little bit too much time taken on reconstructing the so-called state-owned entities and it’s going to allow more rot and more maladministration and we will be paying.”

A look a the big numbers coming out of the 2019 Budget speech.

He said Mboweni should have trimmed the fat more when it comes to government's huge wage bill: “We think that the expenditure should have been reduced because of the corruption and the maladministration over the last number of years.”

WATCH: MPs slam Mboweni's speech


Meanwhile, South African Airways (SAA) CEO Vuyani Jarana said he welcomes the commitment from government to support state-owned enterprises.

Mboweni says government is reviewing the framework of SOEs, with the state setting aside up to R13 billion for financial assistance.

SAA is currently seeking a government bail of R21 billion over the next three years.

Jarana says Mboweni's speech has shown that government is putting in measures to support SOEs.

“A consistent picture by the government to support the transformation of state-owned enterprises to self-sustainable entities, so far, I think it is a good outcome.”

(Edited by Mihlali Ntsabo)