South Africa: a 2020 budget in the context of the economic crisis
View of Johannesburg on November 20, 2014. © Ute Grabowsky / Photothek via Getty Images
Text by: RFI Follow
After the speech of South African President Cyril Ramaphosa on the state of the nation two weeks ago, it was the turn of his Minister of Finance to appear before the Cape Town Parliament on Wednesday, February 26. Tito Mboweni presented his 2020 budget, in a context of economic and financial crisis for the country.
With our correspondent in Johannesburg, Claire Bargelès
Victim of weak growth, a debt that continues to climb and an unemployment rate that borders on 30%, the South African economy is in crisis . Faced with these constraints, the Minister announced that he wanted to reduce spending on the remuneration of public sector workers.
Like last year, Tito Mboweni was keen to support his point with his favorite botanical metaphor: he presented himself again with a Cape Aloe, a plant which, according to him, " survives and manages to grow when the times are tough . " South Africans will need to build on such resilience, as growth is expected to reach 0.9% in 2020 and as a result, the fiscal deficit is expected to climb to 6.8% of GDP, its highest level in 28 years. .
10 billion less for public officials
Contrary to what was expected, the Minister of Finance does not intend to raise the VAT and even wants to lower the corporate tax to help growth. But to control spending, he wants to tackle the weight represented by public officials: just under 10 billion euros will, within three years, be cut from the envelope dedicated to their remuneration.
To see if this acrobatic exercise will speak to the rating agency Moody's, the only one that has not yet placed South Africa in the speculative category. She should review her grade in less than a month.
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- South Africa
- Economic crisis