Sakeliga warns economy will remain a 'prisoner of politics'
Durban - Business group Sakeliga has said that the South African economy is likely to remain a "prisoner of politics", following decisions announced in finance minister Tito Mboweni's medium-term budget speech.
Sakeliga called Mboweni's speech, delivered in Parliament on Wednesday afternoon, "lacklustre".
“Minister Mboweni neglected to answer the real questions, even while admitting that hard times lay ahead. Instead he was constrained by political realities to emphasise marginal, cosmetic improvements. All this means is that the economy is likely to remain a prisoner of politics.”
Although attempts to trim the salaries and benefits of public office-bearers was admirable, the real impact of these changes paled in comparison to the current crisis, said the organisation.
“The real issues remain unaddressed. In the case of Eskom, for instance, the minister had little to offer beyond the usual promises of increased scrutiny. Ultimately, Minister Mboweni could promise little beyond these cosmetic measures – because, whether he likes it or not, Eskom is still holding the economy hostage.
"Given the absence of market-incentives from real competition, a true turnaround of Eskom is likely to remain elusive. Whether by loans or by bailouts, the taxpayer will be saddled with Eskom’s problems for the foreseeable future.”
The same could be said on the topic of the civil service and its ballooning wage bill - no new substantive measures were proposed.
"The minister could only go so far as to promise to discuss the matter with labour. Given the ANC’s record in these negotiations, this is not reassuring."
The organisation said it was ironic that the only assurances and firm commitments that Mboweni could offer were that state debt-levels were likely to further increase – even considering government’s optimistic projections for economic growth.
"As fiscal stress shows no signs of abating, Treasury’s constraints are likely to grow even more serious."
African News Agency (ANA)