Gigaba to Deliver his First Budget Speech

South African Finance Minister Malusi Gigaba speaks to journalists at the World Economic Forum on Africa 2017 meeting in Durban, South Africa, May 3, 2017. REUTERS/Rogan Ward

CAPE TOWN- Parliament has been busy these past two weeks, and Wednesday is not short of that. The finance Minister Malusi Gigaba is expected to give his first budget speech on Wednesday.

The minister is under pressure to inspire any sort of confidence for investors, rating agencies and South Africans.

Economic analysts are predicting a budget speech of inevitable tax hikes.

Treasury may announce a better projection of the 2018’s GDP growth rate, according to an analyst of
Momentum Investments.

Momentum Investments is predicting increased fuel levies or VAT on fuel, as well as increasing so-called ‘sin’ taxes
on alcohol and tobacco.

The sugar tax increases are a certainty and Momentum is also forecasting it will be unlikely that Treasury would
increase taxes on the wealthiest South Africans or up the rate of VAT.

Reaction of ratings agencies will be one of the talking points and the finance minister will be mindful of this.

“A downgrade in SA’s local currency rating to junk status by Moody’s would trigger SA’s exclusion from the Citi World
Government Bond Index (WGBI), which could prompt significant outflows from the SA government bond
market,”

Momentum analysts have also said, “The recent resignation by the former president has raised hopes for a Cabinet reshuffle, which could see the removal of under-performing ministers, including mineral resources, public enterprises, energy and social development,”

Photo Credit-eNCA

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