SPECIAL FEATURE
AN ECONOMIC OVERVIEW OF
SOUTH AFRICA Growing the economy while simultaneously paying off debt presents a huge challenge but infrastructure plans and green financing options offer opportunities. By John Young
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but in his first budget presentation, the midterm budget in November, he did not present any new items of expenditure. Rather, he presented a budget that reflected the fact that there is currently no money to spend on new programmes. There has to be less spending, fewer borrowings and the public debt has to be controlled. Finding a way to grow the economy in that environment will be tough. As to signals of what the new Finance Minister intends doing in the future, one commentator found significance in how Godongwana spent the unexpected windfall of R120-billion that came the way of Treasury because of the high prices of commodities in 2021. Professor Haroon Bhorat of the University of Cape Town broke down “every R1 of tax revenue the government received from this lottery” as follows: 51 cents on debt; 17 cents to civil servant wages; 32 cents on relief packages.
wo numbers came to the fore in 2021, one quite modest, the other ex tremely large. Both the 100MW extension granted on the ability of private power generators to go ahead with a project without the need for licensing and the R130-billion pledged in green financing to South Africa by several rich countries at the COP26 conference could have farreaching consequences for the trajectory of South Africa’s economy. South Africa’s economy has to grow and the country’s debt has to be reduced. How to do these things simultaneously is the challenge for the country’s new Minister of Finance, Enoch Godongwana, who was appointed in August 2021, replacing Tito Mboweni, who asked to be relieved of his duties. Like many of his cabinet colleagues and the president, Godongwana cut his political teeth in the trade union movement SOUTH AFRICAN BUSINESS 2022
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