PRETORIA, South Africa (CU)_ South Africa’s Finance Minister Tito Mboweni is set to unveil the country’s most important budget yet, as the economy grapples with recovering from the Coronavirus pandemic.
Usually, Mboweni delivers his national budget speech alongside a potted aloe vera plant, highly resistant to drought, as a symbol of South Africa’s economic resilience. Following a year of restrictions on people and businesses, resilience what the country needs right now.
Experts say that although the government does not have the money needed to maintain a pro-poor and pro-growth balance, however, increasing taxes is not an option, especially considering the significant number of people being unemployed due to the pandemic. While obtaining more loans to finance the budget is one of the few options, however, public debt of South Africa is rising out of control, with the amount expected to reach over 80 percent of the GDP this year.
South Africa has been the country hardest-hit by Coronavirus in the African continent. Last March, the government declared a “national state of disaster”, and imposed one of the world’s strictest lockdowns, including a six-month border closure, which blocked tourists and capital from overseas.
Moreover, the virus-induced economic downturn across the world dried up revenues, stifling emerging markets and compounding pre-existing struggles. It is reported that the whole of the African continent experienced a 25 to 40 per cent decrease in its foreign direct investment, while remittances dropped by 9 per cent.
“Poverty is on the rise. Inequality is deepening,” President Cyril Ramaphosa said last month.
This time, he compared South Africans, not to aloe vera, but to fynbos, a local plant species whose growth is stimulated by fires, blossoming directly from the ashes. “Like all those who have walked this land before us, we will rise again,” he assured in an upbeat tone.
