SA’s medium-term budget policy statement today takes place at a pivotal moment, not just for SA’s fiscal propriety but for the nation’s politics. SA has a new president in Cyril Ramaphosa; it has a new finance minister in former Reserve Bank governor Tito Mboweni; it has effectively a new senior administration, although of course many of the old regime are part of the new. Much of the budget will have been formulated some time ago, but it is the first concrete opportunity for the new administration to distinguish itself fiscally from the last. There are some very immediate and pressing issues. SA sits on the verge of a unanimous junk rating by the three main ratings agencies, which, if it took place, would make SA's ballooning debt more expensive and would signal to the world the country’s decline has not been reversed.

More broadly, the economy is in a terrible state. Growth estimates for the first two quarters have shocked economists and required the government and the Reser...

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