Minister Malusi Gigaba Has to Play the Juggling Act

The nation’s debts has been assessed as junk by S&P Global Ratings and Fitch Ratings for ratings firms to review. The Minister if Finance, Malusi Gigaba now has to balance slow economic growth and a gaping tax hole against the need to rescue struggling state companies in his first medium-term budget policy statement.

There have been graphs that have been released stipulating the South African’s economy and how it emerged from its second recession in less than a decade in the second quarter and while GDP is forecast to expand faster in 2017 than in 2016’s seven-year low, anaemic investor and business confidence and limiting growth and job creation.

The NKC African Economic said in an e-mail note that this made it difficult to finance the government’s welfare and redistribution plans. The slow GDP growth is making it very difficult for the state to meet its revenue targets The Blooming Survey reported that the tax shortfall for the current fiscal year could be the largest in 18 years.

Authorities may need to adopt a tougher stance in upcoming public-sector wage negotiation rounds, which may be politically difficult.

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