Tito Mboweni. Picture: ESA ALEXANDER
Tito Mboweni. Picture: ESA ALEXANDER

What are the options open to finance minister Tito Mboweni, when he delivers the budget speech on Wednesday?

The minister will have to reintroduce the expenditure ceiling and peg the budget deficit at 6% over the medium term and maintain the total debt at no more than 70% of GDP. Any deviation, however marginal, will be seen by the gallery as credit negative.

He will have to bring to effect inclusive growth by a combination of tax expenditures, incentives and concession. He has to demonstrate a shift from consumption expenditure towards investment and hope to shift the dial of Investment as a percentage of GDP significantly.

Anything significantly higher than paltry capital formation as a percentage of GDP will do very little to placate parliament's gallery, unless the projections show significantly higher rate of growth than the paltry 8%, and at least 20% as a percentage of GDP.

The reimagining of state-owned enterprises (SOEs), the renewed focus of infrastructure and the operationalisation of wealth funds will be some of those measures that Mboweni will be expected take.

The minister will also hope that his gallery audience is also familiar with the strategy paper, “Economic transformation, inclusive growth, and competitiveness: towards an economic strategy for SA,” which includes focusing on network industries agriculture and tourism.

One issue that the gallery and the benches appear to agree on —at times for entirely different reasons — is the issue of structural reform. The phrase has become somewhat hackneyed, and more often obfuscates what is really meant. However, Mboweni will need to be clear and can simply not afford to be ambivalent.

The oligopolistic structure of the major sectors of SA industry that provide barriers to entry will have to be broken. The elimination of onerous conditions that make the ease of doing business, as well as unnecessary travel and visa restrictions, will have to be expedited. The restoration of electricity supply and the falling of more rain will most likely ease concern about power and food security.

Mboweni will have to address the contentious and new issues. Key among these to this is the government wage bill, the Gauteng Toll Road, land reform and the state-owned enterprises (SOEs) in particular SAA and Eskom.

He will need to offer a cogent business case for the envisaged state bank, and the sovereign wealth fund. He will need to apprise the nation about the Land Bank, and the National Empowerment Fund, which — for some reason — did not feature much in President Cyril Ramaphosa's state of the nation address.

Mboweni is acutely aware that when it come to managing the national purse, it is not what is said that is attracts attention, but what is not said that becomes crucial. As a consummate economist and practiced one, he knows all too well that he will need to make defining trade-offs and far-reaching decisions to stabilise the country finances.

Mboweni, who has recently developed a penchant for biblical injunctions, will probably need more than that to marshal the confidence and trust of both the floor and gallery audience. One thing is certain, though: after his speech he will have fewer friends and no-one queuing to take his job. It will be cold comfort to the minister that his job is secure.

• Mahlangu is the chief economist at Amazwe Analytics and Advisory