The day has finally arrived for South Africans to find out if the country's finance minister, Tito Mboweni, will be able to fix the ailing economy when he delivers the nation's national budget plan in Parliament today.  File Photo: Reuters
The day has finally arrived for South Africans to find out if the country's finance minister, Tito Mboweni, will be able to fix the ailing economy when he delivers the nation's national budget plan in Parliament today. File Photo: Reuters

LIVE: Finance Minister Tito Mboweni delivers SA's Budget speech for 2020

By Staff Reporter Time of article published Feb 26, 2020

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JOHANNESBURG - The day has finally arrived for South Africans to find out if the country's finance minister, Tito Mboweni, will be able to fix the ailing economy when he delivers the nation's national budget plan in parliament today. 

Ahead of the budget, one of the most pertinent issues facing the minister was if he could stave of another downgrade by international ratings agency, Moody's.

Analysts said the speech would provide guidance on whether the government had been able to rein in spending and introduce fundamental macroeconomic reforms that could revive the country’s economy.

FXTM senior research analyst Lukman Otunuga said the question on investors’ minds was whether Mboweni would be able to convince Moody’s that he had a reliable plan to stabilise government debt.

“Whatever the outcome of the Budget speech, it will certainly have a lasting impact on the South African rand and the country’s economic outlook,” Otunuga said.

“If the speech disappoints and fear intensifies over a credit downgrade by Moody’s at the end of March, the rand will be in the direct firing line.”

Moody’s is the only major international ratings agency that still has South Africa’s sovereign debt above investment grade. The much-anticipated Budget comes amid declining business activity in South Africa.

Mboweni is expected to announce the implementation of the National Treasury’s strategy to revive the economy as growth is expected to be about 0.5 percent. He is also expected to reveal measures to address the electricity and fiscal crises, and rein in expenditure by cash-strapped state-owned enterprises. 

Moody’s has flagged that it was unsustainable for South Africa to use borrowings to supplement its servicing of current expenditure, including debt servicing costs. The ratings agency is expected to announce its decision on the country’s review at the end of March.

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