Following Finance Minister Malusi Gigaba’s Mid-Term Budget Policy Speech (MTBPS), reactions have been less than hopeful with many experts slamming the minister for his inability to govern in his role effectively.
The speech painted a bleak picture of a situation which many South Africans feel they did not contribute to nor deserve. After the speech it was revealed that the country might, yet again, suffer a credit downgrade due to an overall lack of confidence from local and foreign investors.
Business Leadership South Africa, for one, has released a statement defining the MTBPS as “scary”.
“The cost of servicing this debt, he tells us it’s now 15%, which means we’re at the same level during the days of apartheid, when we were technically bankrupt. This is a classical definition of fiscal cliff.”
Karl Westvig, CEO of Retail Capital had the following to say.
“Minister Malusi Gigaba’s speech today will do little to instill the confidence South African business so desperately needs”.
“With a revised economic growth projection of 0.7% for 2017, down from 1.3%, the market was hoping for a rallying cry supported by a meaningful and tangible plan to address over-indebted consumers and unsupported businesses. While we welcome the instruction that SMEs are to receive payment of legitimate invoices within the prescribed 30 days and failure to do so will result in accounting officers being charged for financial misconduct, the Minister appears to have missed the point”.
“As such a critical sector, employing 60% of SA’s workforce and contributing 57% of SA’s GDP, SMEs need a concrete plan with a single-minded objective to ease the burden of doing business so they can employ more people and contribute to economic growth”.
“There is also a crisis in credibility, which is leading to a general negative sentiment in the economy. Small Business Owners need to be confident of the environment before they invest in capital equipment and hire more staff. This budget speech does little to improve this sentiment. We expect business owners will adopt a wait and see approach before investing further”.
Overall, the MTBPS has furthered the failures of this current administration to supply security to local businesses and consumers.