National Treasury has welcomed the International Monetary Fund (IMF)’s recommendations to improve State-Owned Enterprises (SOEs), in efforts to contribute to the sustainability of public finances.
This comes on the heels of an IMF staff visit to South Africa from May 26 to June 6. The IMF staff acknowledged the progress made in implementing structural reforms.
They urged South Africa to accelerate the implementation of outstanding structural reforms in order to address the country’s economic challenges.
IMF recommendations include the urgent need to address a number of obstacles in the country’s growth, load shedding and deficiencies in the transportation system which limit the benefits from the higher commodity prices.
The IMF says the South African Reserve Bank (SARB) should continue to focus on ensuring low and sustainable inflation.
Meanwhile, in April, International Monetary Fund Managing Director Kristalina Georgieva said South Africa has an economy with underutilised potential.
Georgieva called for policymakers to fortify the country’s fundamentals so as to be able to withstand the next shocks and crises that are likely to emerge.
The video below is the full interview with Kristalina Georgieva:
In 2021, the government said there will be no additional funding for struggling state-owned enterprises (SOEs).
In his Mid-term Budget Policy Statement, Finance Minister Enoch Godongwana said they have proposed to maintain restraint in public expenditure.
The government will not be committing to new long-term spending in response to temporary revenue windfalls and no additional funding will be provided to state-owned companies.
Godongwana said he is giving SOEs tough love and their days of getting bailouts are over.
2021 Mid-Term Budget Policy Statement