BUSI MAVUSO: Fiscal reform just part of a structural reform needed for growth
We can no longer ignore an iceberg that we can so clearly see ahead: hit that, and the next stop is an IMF bailout and loss of sovereignty
In the past month, we’ve heard two important messages for the country reeling from the effect of the Covid-19 pandemic. First was a message of hope through President Cyril Ramaphosa’s economic recovery plan, then the more sober portrayal of the state’s dire financial position in the medium-term budget policy statement (MTBPS).
Finance minister Tito Mboweni warned of a looming sovereign debt crisis, one where we won’t be able to pay our bills. That’s a development that just doesn’t happen overnight. History has taught us that there are plenty of warning signs before a country hits the proverbial brick wall. For political reasons, elected leaders generally choose to ignore these signs because of the perceived difficulty of dealing with the structural reforms that must happen if a country is to balance its books and at the same time getting re-elected...