Professor at the Wits School of Economics Business Science, Lumkile Mondi, says the Reserve bank should play a more active role in helping government to manage the country’s four-trillion-rand debt crisis.
His comments come as President Cyril Ramaphosa prepares to deliver the State-of-the-Nation-Address this evening.
Rating agencies have also flagged the country’s growing debt as an impediment to growth, while National Treasury projects that the national debt will increase to over 80% of the Gross Domestic Product this year.
Mondi says an increase in tax would prompt more people to move their money off-shore due to the public’s lack of faith in the government’s ability to manage public resources.
“It requires an expansionary fiscal model where government leans on the central bank to assist it by borrowing more of government debt and therefore putting liquidity to enable government to really invest hugely on failing infrastructure.”
Meanwhile, economist Azar Jammine says President Cyril Ramaphosa should focus on addressing the crisis in the country’s education system in his SONA. Jammine says without a functioning education system, the economy cannot grow and ultimately jobs cannot be created.
South Africa’s unemployment rate currently stands at 30.8%. It is the highest jobless rate since quarterly data became available in 2008, with more people searching for work amid the easing of lockdown restrictions.
Jammine says plays a crucial role in securing a country’s economic progress.
In the video, Econometrix chief economist Azar Jammine discusses SONA 2021 expectations :
2021 SONA to cost R100 000
Meanwhile, Speaker of the National Assembly Thandi Modise says the State of the Nation Address is expected to cost about R100 000.
This is significantly less than the millions of rand it has cost taxpayers in previous years.
The usual pomp and ceremony around the event have been cancelled due to the COVID-19 pandemic.
Only 50 people will be allowed inside the National Assembly when President Ramaphosa presents his address, while other members of Parliament and guests will follow proceedings on virtual platforms.
These include MPs, guests and media.
Modise says this year the biggest expense will be connectivity costs.
“The only cost to bear as Parliament for this particular SONA will be the cost of paying for virtual connectivity. Thus far, Parliament is estimating just over R100 000 for this whole exercise,” explains Modise.
SONA 2021 Expectations | Tackling socio-economic challenges in SA:
Additional reporting by SABC News