- Together with increasingly incoherent pandemic management, corruption scandals threaten to weaken President Cyril Ramaphosa.
- They could cost the ANC at the ballot box in 2021, though few established opposition parties are well placed to gain from this; apathy may emerge as the biggest winner.
Category: South Africa
In a 15 July letter of commitment to South African Airways (SAA)’s business rescue practitioners, the ministers of finance and public enterprises committed “to mobilize funding for the short-, medium- and long-term requirements to create a viable and sustainable national airline.”… Read the rest
- Despite the accelerating Covid-19 “storm,” the government may hesitate to revert to harsher lockdown measures.
- But the handling of the crisis poses growing political risks for President Cyril Ramaphosa, which could begin to fuel speculation about his tenure.
- Criticism of the Treasury’s “austerity” budget may generate noise, though parliamentary approval of appropriation bills is normally a formality.
- Another source of tensions – and doubts over promised spending cuts – will be the battle over additional funds for South African Airways (SAA)’s business rescue.
- Finance Minister Tito Mboweni’s adjustment budget – due on 24 June – is expected to forecast the budget deficit climbing to more than 14% of GDP.
- Immediate questions will revolve around how April’s ZAR 500bn stimulus package will be financed, which will include the reprioritization of existing spending and external financing from lenders like the IMF.
- Finance Minister Tito Mboweni’s supplementary budget – presented today, 24 June – was as bleak as expected.
- The finance minister coated the terrible fiscal picture in tough talk about the longer-term need for consolidation, but the emergency budget leaves many loose ends, some of which will only be clarified in October’s mid-term budget.
- Although ongoing legal battles over government regulations are unlikely to scupper South Africa’s lockdown exit, they compound an already highly uncertain operating environment for business.
- The already complicated reopening process coincides with a marked rise in infection rates.
- The ruling party is pushing plans for a ZAR 350bn infrastructure fund as one of the very few options available to boost South Africa’s economic recovery prospects.
- Controversial infrastructure funding proposals, albeit at an early stage, aim to target pension funds and envisage the Reserve Bank creating a ZAR 500bn “funding instrument.”
While the fiscal picture remains uncertain ahead of the emergency budget planned on 24 June, two proposals made headlines this week. First, Public Investment Corporation (PIC) Chair Reuel Khoza said on 28 May that the institution had submitted a proposal to convert close to ZAR 100bn (USD 5.7bn) of Eskom bonds into equity.… Read the rest
● On Sunday evening, 24 May, President Cyril Ramaphosa announced that, from 1 June, South Africa’s pandemic risk level would be reduced from the current 4 to 3.
● Although infection rates are still rising, Ramaphosa has made significant restart concessions in response to economic pressure mounting from all sides.… Read the rest