Explainer: why amendments to SA’s ‘Money Bills Act’ matter
Parliament has overall oversight of public finances, which is why we should pay attention to how it exercises it, and the institutions involved, writes Seán Mfundza Muller
SA’s public finances may be in their worst state since the first democratic elections in 1994. One source of these woes was the 2008 financial crisis, but its effects have been compounded by bad political decisions which have led to slower economic growth, under-performance of tax revenue collection and higher borrowing. At the top of the list of bad decisions has been appointments to critical institutions that appear to have been based on patronage with the intention of facilitating corruption. In the public finance space these include the South African Revenue Service, the Ministry of Finance, and the board members and managers of key state-owned entities. The poor management and loss of investor confidence that’s followed played a significant role in SA’s recent credit rating downgrades. The downgrades compounded the broader public finance challenges by increasing borrowing costs for national government and state-owned enterprises. In this environment, there’s increasing apprecia...
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