Minister of Finance Tito Mboweni Opposition parties in Parliament said Mboweni’s Medium Term Policy statement painted a grim picture about the state of the economy in the country. Phando Jikelo African News Agency (ANA)
CAPE TOWN - Opposition parties in Parliament said Finance Minister Tito Mboweni’s Medium Term Budget Policy statement painted a grim picture about the state of the economy in the country.

They said Mboweni should have used the speech to deal with some of the problems in the state including struggling entities and clamping down on corruption.

In his speech Mboweni said the country was at a crossroads, it could either choose a path of hope or of despair.

He warned that South Africans were under pressure with rising fuel prices and electricity.

Mboweni announced cash injections for four struggling state-owned entities, but said the time had come to reconfigure parastatals with the help of the private sector.

“Reconfiguring our state-owned enterprises requires us to take a hard look at how they operate.

“Our current challenges with state-owned companies present an opportunity to demolish the walls that exist between the private and public sectors,” Mboweni said.

He said President Cyril Ramaphosa was focused on addressing the “urgent and pressing matters” bedevilling the education and health sectors.

“The largest allocations in the medium-term are for education, health, social development and community development. Together, these four areas will receive more than 60% of non-interest expenditure,” said Mboweni.

Reacting to the speech, Ramaphosa lauded Mboweni, saying: “A sterling performance by (the) minister in his maiden speech. He clearly outlined what we need to do to rebuild those foundations that he articulated in the biblical sense. I think we are now well-positioned to implement our stimulus and economic recovery plan moving forward to strengthen the economy, and respond to the technical recession that we are in.

“We will now be able to move forward with even greater determination,” Ramaphosa said.

However EFF chief whip Floyd Shivambu described Mboweni’s statement as underwhelming.

“Overall, the whole intervention was underwhelming.

“I don’t think people must have any renewed hopes,” Shivambu said .

He said Mboweni fired “worrying shots” over the public wage bill, which was continuing to place pressure on public finances.

UDM chief whip Nqabayomzi Kwankwa said the speech painted a grim picture of the state of the country.

He said the government failed to deal with corruption despite being warned about it for so many years.

The DA’s David Maynier said judging by Mboweni’s speech the government had no plan to revive the economy.

“I think the medium-term budget review is a full scale blow-out with national debt standing at R3.6trillion, what this means is that we will be spending about R247billion on debt service costs, which is equivalent to what we are spending on basic services,” said Maynier.

He said he was pleased that Mboweni would deal with the VBS Mutual Bank.

Steve Swart of the African Christian Democratic Party said they were concerned about fiscal slippage and the government not reining in the rising public debt.

He said Mboweni had little room to move given the recession.

However, they acknowledged that Mboweni promised to deal with the rising debt.

The debt service is now sitting at R181billion.