Own Correspondent

Tito Mboweni during his address on the supplementary budget announcement warned South Africans that by walking the easier path in addressing the crisis at hand may lead to a sovereign debt crisis.

He referred to the sovereign debt crisis which took place in German in the 1920s, or Zimbabwe and Greece more recently which all arise from debt service costs.  Debt is hoped to rise to 87% of the GDP within the next 12 months and the debt comes at an interest.

The public finances are dangerously overstretched as a result of the crisis which has been worsened by the coronavirus.

Mboweni has advocated for re-prioritisation of spending within economic agents as there is need to boost growth within the economy which is was projected to contract by 7% in the year 2020.

Mboweni says that the government will be allocating R3 billion to recapitalise the Land Bank as a way of addressing the situation at hand.

The minister went on to add that the principle of zero-based budgeting is that we must see “demonstrable value for money”:

“Eskom will need to show progress in meeting the milestones as laid down in the Roadmap. This is non-negotiable,” he says.  

Members of the public had been complaining about the bail outs which are constantly being given to state enterprises which are running losses with each passing financial year.

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