‘The fiscal framework is sacrosanct’ – Mboweni speaks tough on govt spending

Finance Minister Tito Mboweni is trying to avoid the country being swept up into a debt spiral from the headwinds of low economic growth, a revenue shortfall, and high debt and interest costs.

Finance Minister Tito Mboweni delivers his Budget speech in Parliament on 24 February 2021. Picture: GCIS.

CAPE TOWN – Finance Minister Tito Mboweni has made it clear that he will not bend on curbing government spending, saying departments would have to find money within their own budgets for whatever they needed.

Mboweni is trying to avoid the country being swept up into a debt spiral from the headwinds of low economic growth, a revenue shortfall and high debt, and interest costs.

This, amid increasing demands on the public purse, not least from the impact of the COVID-19 pandemic.

Key to keeping government spending within limits will be the outcome of negotiations over the public sector wage bill.

READ: Mboweni warns of growing intolerance over ‘unimpressive’ local govt performance

Tabling his budget speech in Parliament on Thursday, Mboweni was emphatic he would not give way on government spending.

“The South African government continues to pursue a balanced and prudent fiscal strategy – this fiscal strategy has a framework, and that fiscal framework was presented in the house and we have no intention whatsoever of breaking this fiscal framework. As I have said before, the fiscal framework is sacrosanct – we can’t break it.”

Mboweni said there were some green shoots on the economic horizon.

“Taking this opportunity will depend on our ability to implement, in a very serious way, domestic economic reforms. At the same time, there are many risks to the outlook, including the ongoing COVID-19 pandemic, uncertainty about the sustainability of emerging market debt in a period of rising global interest rates and our domestic electricity constraints.”

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