South Africa expected to cut wage bill
South Africa were expected to unveil government spending plans for the 2021 financial year yesterday, as the continent's most industrialised economy grapples with recovering from the coronavirus and a pre-pandemic recession.
Finance Minister Tito Mboweni usually delivers his national budget speech alongside a potted aloe vera plant, highly resistant to drought, as a symbol of South Africa's economic resilience.
"There's not a lot of money and we need to have a pro-poor and pro-growth balance," University of Johannesburg business lecturer Daniel Meyer told AFP.
He added that increasing taxes was not an option, following the pandemic-induced loss of livelihoods, and with local elections due this year.
Official unemployment in South Africa soared to a record 32.5% in the fourth quarter of last year, the highest since records began in 2008.
Mboweni "will have to take more loans to finance the budget," Meyer said. But public debt is already expected to reach over 80% of GDP this year.
"Debt is rising out of control," Meyer warned, noting that a junk status downgrade last year would make borrowing more expensive.
"So Mboweni will have to cut the public wage bill." South Africa is the country hardest-hit by coronavirus in Africa.
The global economic downturn brought on by the virus dried up revenues, stifling emerging markets and compounding pre-existing struggles. South Africa, which derives at least eight percent of its GDP from mineral exports, has been particularly hard-hit. - Nampa/AFP
Finance Minister Tito Mboweni usually delivers his national budget speech alongside a potted aloe vera plant, highly resistant to drought, as a symbol of South Africa's economic resilience.
"There's not a lot of money and we need to have a pro-poor and pro-growth balance," University of Johannesburg business lecturer Daniel Meyer told AFP.
He added that increasing taxes was not an option, following the pandemic-induced loss of livelihoods, and with local elections due this year.
Official unemployment in South Africa soared to a record 32.5% in the fourth quarter of last year, the highest since records began in 2008.
Mboweni "will have to take more loans to finance the budget," Meyer said. But public debt is already expected to reach over 80% of GDP this year.
"Debt is rising out of control," Meyer warned, noting that a junk status downgrade last year would make borrowing more expensive.
"So Mboweni will have to cut the public wage bill." South Africa is the country hardest-hit by coronavirus in Africa.
The global economic downturn brought on by the virus dried up revenues, stifling emerging markets and compounding pre-existing struggles. South Africa, which derives at least eight percent of its GDP from mineral exports, has been particularly hard-hit. - Nampa/AFP
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