GALLERY: Finance Minister Tito Mboweni delivers the 2019 Medium-term Budget Policy Statement
DURBAN - Finance Minister Tito Mboweni, on Wednesday, delivered his Medium-term Budget Policy Statement to South Africa in Parliament.
In his address the Finance Minister focused on state-owned enterprises as well as the South African Reserve Bank, fiscal framework, revenue performance and outlook and e-tolls.
Government has announced a comprehensive set of structural reforms for Eskom and the energy sector, which we are supporting with R230 billion over the next 10 years.
According to Mboweni, South African Airways is unlikely ever to generate sufficient cash flow to sustain operations in its current configuration.
However, the Minister later announced that there are conversations involving SAA and potential equity partners.
While speaking about e-tolls, Mboweni urged people to pay their e-toll bills.
"I urge the nation to please pay your bills. We need to build a culture of payment, as government services can only be sustainable if all of us that can pay for services, do so" said Mboweni.
Mboweni also made some important points about the South African economy including:
1. In the first quarter of this year, the South African economy contracted by a revised 3.1 per cent on a seasonally adjusted and annualised basis.
2. As the energy constraint lifted, growth rebounded to 3.1 per cent in the second quarter. These two quarters cancelled each other out, and this year growth has been flat. There are some signs that investment spending is strengthening.
3. In the second quarter, growth in gross fixed capital formation rebounded to 6.1 per cent.
4. Mining grew by 14.4 per cent. In real terms, credit growth has been positive since late 2018.
5. Private sector credit extension rose 6.2 per cent in September. Home loans grew 5 per cent year‐on‐year, the fastest rate in some time. But corporate credit extension has softened.
6. In September, headline consumer price inflation was 4.1 per cent. Lower inflation is good for everyone, particularly for the poor and the working class.
7. The economy is now forecast to grow at 0.5 per cent in 2019 compared to the 1.5 per cent expected in February. Growth is projected to slowly rise to 1.7 per cent in 2022, supported by household consumption and private‐sector investment.
BUSINESS REPORT ONLINE