National Treasury is reviewing SA’s macroeconomic policy: Minister

Finance Minister Enoch Godogwana says National Treasury is reviewing the country’s macro-economic policy. Godogwana has told parliament during the virtual budget vote on Wednesday that there’s a need to rehabilitate the country’s public finances.

The review will examine how some of the key economic indicators have evolved and assess the implementation of policies.

The Minister says National Treasury will work with government Departments to achieve the reconstruction and recovery plan.

National Treasury told parliament that the country’s economic condition remains uncertain.

And while South Africa is on the path of economic reconstruction and recovery, the COVID-19 pandemic continues to create global uncertainty, among other factors.

All this comes at a time when South Africa is facing a multitude of systemic challenges of inequality, poverty and unemployment.

The country’s debt-service costs amount to 34.4% of the Department’s budget over the Medium-Term Expenditure Framework period.

“For National Treasury, this will require a determined effort in pursuing our ongoing endeavours to accelerate a growth economy including tackling structural constraints, applying measures to restore investor confidence and public trust, safeguarding the fiscal framework, reducing policy uncertainty and lowering the cost of doing business.”

Finance Minister Godogwana says Treasury is reviewing SA’s macro-economic policy:

Godogwana says National Treasury is working on restoring public finances that remain under strain.

“National Treasury will continue to support government’s ability to ensure stable, sustainable growth and equitable and efficient allocation of public resources. We will continue to pursue a balanced and prudent fiscal strategy in order to stabilise the public finances. Although public finances remain under some strain, the fiscal position has improved somewhat in comparison to this time last year. We cannot let our guard down as we remain on course to restoring the health of public finances.”

The Minister has reiterated his position on cutting down on government guarantees to State-Owned Enterprises. But he says Treasury is exploring avenues to deal with Eskom’s debt currently sitting at around R300 billion.

“Government will continue to finance the gross borrowing requirement while minimising refinancing risk, currency risk and overall borrowing costs. To reduce their continuing demands on South Africa’s public resources, the national treasury will outline criteria for government funding of socs. Eskom is faced with a large amount of debt that remains a challenge to service without assistance. The National Treasury is working on a sustainable solution to deal with Eskom’s debt in a manner that is equitable and fair to all stakeholders. The work on the review of governance systems of several high-risk state-owned entities is underway.”

National Treasury says it supports the government’s plan of addressing inefficiency and the high cost of utility bills such as electricity, water, transport and telecommunications.

It says these costs work against the state’s goal of improving the ease of doing business in the country.