Finance minister Tito Mboweni’s maiden budget speech is an exercise in structural reform, aimed at reducing the immediate fiscal and economic risks posed by Eskom and other state-owned enterprises’ (SOEs') unsustainable balance sheets and operational models. Without a doubt the fiscal numbers show a marginal deterioration when compared with the 2018 medium-term budget policy statement (MTBPS), and a little more than that if we compare with the 2018 Budget Review. The consolidated budget deficit for 2018/2019 slips to 4.2% of GDP from the 2018 MTBPS’s forecast of 3.6%, rising to 4.5% of GDP in 2019/2020 before moderating to 4% by 2021/2022. The debt-to-GDP ratio now stabilises at 60% of GDP in 2023/2024, which is slightly higher than the 59.6% previously projected. These decimal-point deteriorations are a necessary slippage to allow reform packages that will create a more stable and predictable operating environment. Our overall assessment is that this was a tough budget but it is re...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now