Some economists question whether Budget good enough to boost confidence in SA

Finance Minister Enoch Godongwana has made use of a R182 billion tax revenue surplus to put money back in the pockets of consumers by snubbing increases on the fuel and Road Accident Fund (RAF) levy.

Finance Minister Enoch Godongwana tables his Budget in Parliament on 23 February 2022. Picture: @TreasuryRSA/Twitter

JOHANNESBURG - While Finance Minister Enoch Godongwana’s budget has shown a pro-consumer approach, some economists have questioned whether it would be enough to provide the much-needed boost in confidence.

Godongwana tabled his maiden Budget of R2.16 trillion on Wednesday, which has been welcomed but also criticised.

He has made use of a R182 billion tax revenue surplus to put money back in the pockets of consumers by snubbing increases on the fuel and Road Accident Fund (RAF) levy.

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The better-than-expected revenue collection has given Godongwana room to provide some relief for consumers and to keep the promise of his predecessor, Tito Mboweni, by slashing corporate income tax by 1% from 28% to 27%.

But IQ Business chief economist Sifiso Skenjana said that Godongwana did not focus on what mattered most.

"This is particularly with respect to fiscal reform required around SOEs and reigning in the continued funding of SOEs, specifically Eskom in this case," Skenajan said.

But Investec chief economist Annabel Bishop said that it looked like an excellent budget on face value.

"The decline in projected debt ratios and deficit ratios will still not be enough for credit rating upgrades. They will, however, serve to likely stabilise South Africa's credit ratings and serve to remove the negative outlook that Moody's has," Bishop explained.

Bishop said that it would now be up to Cabinet to translate the themes from President Cyril Ramaphosa’s State of the Nation Address (Sona) and the Budget into government.

WATCH: Sin tax, social grants and fuel levy: Everything you need to know from 2022 Budget Speech