JOHANNESBURG – Finance Minister Tito Mboweni on Wednesday delivered his Medium-term Budget Policy Statement (MTBPS) to South Africa in Parliament.
Moboweni said the MTBPS was an important piece of South Africa's budgeting process.
The finance minister cut the forecast for growth by 1 percent, saying that the government now expected the economy to grow by just 0.5 percent, although it was previously expected that the economy would grow by 1.5 percent, .
"Growth is projected to slowly rise to 1.7 percent in 2022, supported by household consumption and private‐sector investment," Mboweni said.
On the matter of growing the economy further, Mboweni said: "Under the leadership of President Ramaphosa, the structural reform agenda contained in the National Development Plan has been given new life."
Mboweni said that progress has been made in the following:
1. The new Integrated Resources Plan has been gazetted
2. The Infrastructure Fund is being rolled out
3. The visa regime has been greatly simplified
4. The unabridged birth certificate requirement for young tourists has been abolished
5. We have upgraded a number of industrial parks
6. Cabinet has directed ICASA to accelerate the licensing of high‐demand broadband spectrum
Mboweni said the paper titled "Towards an Economic Strategy for South Africa” draws lessons from fast‐growing emerging and sub‐Saharan African economies. The paper speaks for itself. But, in brief, we argue that there are a few important growth ingredients:
1. An efficient and capable state
2. Prudent fiscal and monetary policy
3. A competitive and flexible exchange rate
4. A trade regime which promotes open and beneficial trade, particularly with the rest of the African continent
5. A reimagined industrial strategy
6. Opening up ‘network industries’ that is transport, logistics and telecommunications. This means reorganising Eskom and other state‐owned companies
7. Lowering barriers to entry
8. Prioritising job‐creating sectors, such as agriculture and tourism
9. An overarching legal framework with an independent judiciary and strong property rights
10. A well‐functioning financial sector
Mboweni said that the country was having a rigorous debate about these proposals.
"We received over 800 comments. Proposals included ideas on the digital economy, streamlining applications for new ports, and opening up the railways to force heavy freight off our roads, ease congestion and improve safety. Thank you to everyone who tweeted, facebooked, emailed, phoned, wrote letters, held conferences, wrote articles in various publications and issued press releases."
Mboweni said that some of the things can be done quickly, such as the new Integrated Resources Plan, which charts a greener course forward on energy.
"We can accelerate spectrum licensing and a move towards 5G. We can make it easier to do business. The President is driving a critical youth employment initiative. We have supported the Youth Employment Service known as YES! through expanding the employment tax incentive."
Mboweni said that he looked forward to the YES! initiative bringing forward new ideas.
"Today, we publish Version 2 of the document. It is a living document. As such it is ‘not a dogma but a guide to action’. Where appropriate, we will consider legislation," Mboweni said.