Finance minister Tito Mboweni faces a fiscal conundrum so daunting that he has been forced to delay the medium-term budget policy statement (MTBPS) by a week. The problem is that he overpromised when he convinced the country in July that SA had to choose an “active” fiscal path that would allow debt to stabilise at 87% of GDP by 2023/2024.

This path was also sold to the IMF as the basis on which it agreed to release R70bn to shore up the 2020/2021 fiscal deficit, which is expected to be a massive 15% of GDP. However, according to work by academic economists and adopted by the president’s economic advisory council, the 87% target was never remotely feasible and, even if it were, it certainly is not desirable to cut expenditure by the required R230bn given the devastation wrought by Covid-19...

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