South Africa's finance minister delivers a budget designed to steady the ship

2 days ago
South African Finance MInister Tito Mboweni delivering the 2019 budget speech in parliament. GCIS

South Africa is supposed to be a secular state, but one can perhaps forgive Tito Mboweni, the Minister of Finance, for quoting numerous biblical verses in his 2019 Budget Speech. After all, South Africa’s fiscal situation is enough to make many people hope for divine intervention.

The 2019 budget numbers show that the past year has been no exception to some “new normals” that have been established in South Africa. These include slow economic growth, state-owned enterprises requiring unplanned financial support, failing plans aimed at stabilising national debt levels, and tax revenues significantly lower than forecast.

All were present in this year’s budget.

Economic growth forecasts have been revised down from a paltry 1.7% to 1.5%. Revenue collection was R42.8bn lower than expected in the 2018 Budget. And Mboweni is promising to stabilise gross national debt slightly above 60% of gross domestic product in 2023. This follows many failed promises in previous budgets to stabilise gross national debt below 50% of GDP.

read more

Rolling blackouts are killing small businesses in South Africa

6 days 2 hours ago
“We are losing profits. Our clients are impatient and always in a hurry. They can’t wait for about two and a half hours.”

By Mary-Anne Gontsana, Thembela Ntongana and Tariro Washinyira

Photo of restauranteers
Thulani Mguda and Tumi Mayende say that even though their restaurant in Gugulethu is doing well, load shedding has been making things difficult for them. Photo: Mary-Anne Gontsana

Toni Burton started Zizamele Ceramics in 2008. Located in Masiphumelele, a small township in the south of Cape Town, she employs nine people. She has trained them to do ceramics. She and her employees depend on this small business for their livelihood.

The kilns which make the pottery the business sells, cannot work without electricity. “We may need to resort to going to the studio at night to switch the kilns on after load-shedding ends at 8:30pm and before the 10am one begins,” Burton says. But she also says it’s dangerous to travel in Masiphumelele at night.

The kiln needs to reach a temperature of 1,000ºC over 12 hours. During load shedding it is impossible to get one firing cycle completed before the next outage begins. “Our glaze firing takes even longer as it needs to reach 1,175ºC over 14 hours,” Burton explains.

She is investigating using paraffin to power the kilns. That would mean getting rid of the ones that use electricity.

read more

1 hour 18 minutes ago
Subscribe to Economy feed