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Mboweni: 'Eskom’s turnaround can’t be allowed to fail'

Tito Mboweni delivered the Budget on Wednesday during which he gave more details on how Eskom’s to be rescued and how the state aims to save money.

Finance Minister Tito Mboweni delivers the 2019 Budget speech on 20 February 2019. Picture: GCIS

CAPE TOWN - Finance Minister Tito Mboweni did his best to assure the country that our economy will weather its many woes.

Mboweni delivered the Budget on Wednesday during which he gave more details on how Eskom’s to be rescued and how the state aims to save money.

But Mboweni has warned struggling state-owned entities should no longer be given unconditional bailouts.

On Eskom, he says that Treasury is setting aside R69 billion over the next three years to guide the restructuring of the power utility.

He adds that the power company's turnaround can't be allowed to fail.

“This will set the electricity market on a new trajectory and allow for more competition, transparency and a focused funding model.”

WATCH: #Budget2019 in 60 seconds with Bruce Whitfield

Mboweni, however, stated emphatically that Eskom must continue to service its debt with the help of the state.

And guarantees to Denel and South African Airways (SAA) have also been increased this year. But Mboweni says such measures need to stop.

“Cabinet is considering a proposal to end the issue of guarantees for operational expenses.”

The finance chief also announced a considerable cut back in the public sector wage bill to the tune of 27 billion over the next three years.

Civil servants between the ages of 55 and 59 are also being encouraged to consider early retirement. It's hoped this will save government more than R20 billion.

Presenting his R1.8 trillion Budget, Mboweni says the country’s recovery from last year’s recession will be slower than expected but steady.

“It is expected that real GDP growth in 2019 will rise to 1.5% and then strengthen moderately to 2.1% in 2021.”

(Edited by Shimoney Regter)

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