Finance minister Enoch Godongwana warned that next month’s budget will be a “difficult one” as the nation’s ability to service its growing debt remains a challenge.
Godongwana will table the annual budget in late February, when he will announce more details on the National Treasury’s plans to arrest ballooning debt, he told Johannesburg-based broadcaster Newzroom Afrika on Monday.
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“Right now we have got a challenge because our growth levels are insufficient to be able to cope with higher levels of debt,” he said. “I will have more on this in the February budget next month. I can tell you now, we are operating in a fairly constrained fiscal space so the message we are likely to put across in February is going to be a difficult one.”
In his mid-term budget in November, Godongwana stressed the need to stabilise public finances and accelerate growth as the Treasury warned off a higher debt trajectory over the next two years. Ongoing power cuts and a logistics crisis continue to constrain economic growth in Africa’s most industrialised economy.
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Next month’s budget will come before South Africa’s general election that’s expected to take place by August, and in which the ruling African National Congress will fight to hold on to the national majority it’s had since coming to power three decades ago.