by SAVIOUS KWINIKA
JOHANNESBURG, (CAJ News) – SOUTH Africa faces a tough balancing act between resolving rising economic crises and reducing its budget deficit.
President Cyril Ramaphosa conceded the levels of debt were unsustainable, coming at a time of rising unemployment and poverty.
These challenges have escalated, worsened by the outbreak of the COVID-19 pandemic.
Ramaphosa said unsustainable levels of debt were bad for all South Africans, for the poor in particular.
He added the cost of debt reduces the amount of money that government has to improve services, provide social protection and invest in social and economic infrastructure.
Last week, Minister of Finance, Enoch Godongwana, presented a Budget that supports and reinforces the programme of action Ramaphosa announced in the State of the Nation Address (SONA) to grow the economy and create jobs.
“With this Budget, we are now on track to reduce our budget deficit – and hence our borrowing requirements – while responding to the challenges that South Africans face, now and into the future,” Ramaphosa stated.
He wrote on his weekly newsletter, made available on Monday.
“The Budget demonstrates our ability and commitment to strike this balance,” the president stated.
“It is a difficult balance to achieve, but with more efficient use of resources, ending wastage and corruption, and shifting spending from consumption to investment, we can achieve fiscal sustainability while continuing to support growth.”
Ramaphosa said South Africa’s path to recovery is steep and will be extremely challenging.
“But with the measures we set out in SONA, with the Budget that has been presented, and with the cooperation and involvement of all South Africans, we will succeed,” he added.
– CAJ News