Finance Minister Tito Mboweni on Friday urged Parliament, Cabinet and President Cyril Ramaphosa to consider moving the country to a zero-based budget approach. File photo: Phando Jikelo/African News Agency (ANA)
Finance Minister Tito Mboweni on Friday urged Parliament, Cabinet and President Cyril Ramaphosa to consider moving the country to a zero-based budget approach. File photo: Phando Jikelo/African News Agency (ANA)

Finance Minister Tito Mboweni calls for zero-based budgeting

By ANA Reporter Time of article published Jun 12, 2020

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Parliament - Finance Minister Tito Mboweni on Friday called for South Africa to move to a fiscal stance based on zero-based budgeting to deal with the economic ravages of the Covid-19 pandemic.

"The new situation, in my view, in my observation, requires that we think seriously about going to zero-based budgeting," the  minister told the National Assembly as he closed the debate on the Appropriations Bill.

"In other words, refocus our attention on those strategic issues that we can do, refocus our attention on the growth-enhancing activities (and) no longer take for granted that the baseline that was there last year, will always be the case."

Mboweni urged MPs to research the term – which implies scrupulous cost containment by weighing every item of expenditure – because he believes that Parliament should endorse this approach. It would mean a significant departure from the current approach of using one year's budget as the baseline for that of the following year. Instead, every new budget would start from a zero base.

"I recommend strongly to my Cabinet colleagues, to the president, that going forward this is what we must do," he added.

"This  zero-based budgeting system will also go very well, hand in glove, with the district development framework which the president has put in place so that we focus our attention on where the people are and (on) supporting economic activity in the lives of our people."

Mboweni said it would entail focusing on infrastructure development and other growth-enhancing measures, while cutting all unnecessary expenditure " we thought we could afford and yet can't afford".

The South African Reserve Bank (SARB) expects the domestic economy to contract by 7% in 2020. It was plagued by low growth, high fiscal deficits and a weak currency before the global health crisis struck and sent the country deeper into recession.

The SARB has forecast that the country will lose R285 billion (about US$16.7bn) in projected revenue this year .

The bill was based on the national budget Mboweni tabled in February and it will be overtaken by the supplementary budget and Special Appropriations Bill the minister will table to the legislature later this month in response to the Covid-19 crisis.

African News Agency/ANA

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