Economist Thabi Leoka is warning that funding for various government-controlled sectors, such as health and education, may be affected due to Eskom’s dire financial situation.
This as the Minister of Finance Tito Mboweni, in his first Budget speech in the National Assembly on Wednesday, has to reassure investors over Eskom, without alienating union allies ahead of national elections.
Leoka says Eskom’s debt burden is more than the funds allocated to health and education combined.
She says Eskom’s budget may be absorbed by the national budget to assist the failing state-owned enterprise.
“Eskom is such a problem that he may move the budget and allocate, or at least move it into the national budget. So Eskom’s budget may actually be absorbed by the national budget and the risk there is that it increases the deficit and Eskom’s debt burden is more than the money that is allocated to health and education combined. But you can’t afford to not rescue Eskom. It is too big to fail – at the cost of many other things like development, education, infrastructure, health – that is going to be the cost of not allocating funds towards what is necessary for the country,” says Leoka.
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@tito_mboweni the survival of Eskom it’s paramount to our growth prospects and GDP, Government has already spent Billions on new and refurbished Power station unfortunately there’s no turning back and they have to work. #Budget2019
— Letlotlo ?®️ (@TheAlchemist_ZA) February 20, 2019
Hope lessons from Kigali will be worth it!
— Tumi Sole (@tumisole) February 20, 2019
If the finance minister doesn’t tell us what happened to the R100 billion raised at the Global Citizens concert then we know this is a mafia state with Patrice Motsepe and Ramaphosa being the faces. #Budget2019
— Son of Biko (@Owami_Dlamini) February 20, 2019
This evening Mr Kigali will promise us jobs on the #Budget2019, he will promise to pump money into education yet later they will shoot students when they demand low/no fees in schools. He will still pump money into Eskom & a week later they’ll be load shedding. But go on, VOTANI
— Drunk Thoughts (@Drunk_Reviewer) February 20, 2019