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| President Cyril Ramaphosa |
South Africa’s finance ministry said on Monday it was set to spell out “tough decisions’’ in its 2018 budget to be presented before the Parliament on Wednesday.
The ministry’s spokesman, Mayihlome Tshwete, said in Johannesburg that the tough decisions were meant to plug the revenue gap and narrow the deficit to repair the ailing economy.
“The (October budget) built up a very clear honest picture of the economic environment we are in.
“What people should expect is some repairing type of interventions taken to restore the books of National Treasury,’’ Tshwete, said when asked what was expected of Wednesday’s budget.
“That means tough decisions have to be taken by government … there is no question we need to address the 50 billion (rand) elephant in the room.’’
South Africa’s economy faces a 50.8 billion rand ($4.36 billion) revenue gap in the 2017/18 fiscal year.
Finance Minister Malusi Gigaba, whose position is uncertain now amid talk of an imminent reshuffle by President Cyril Ramaphosa, announced the weak growth estimates and rising government debt in October last year.
Though it remained to be seen whether Gigaba would be the one tabling the budget in parliament on Wednesday, his spokesman indicated there was no stepping back from tough measures which have also been emphasised by Ramaphosa.
Tax hikes, including higher value added tax (VAT), could help plug the shortfall, analysts say.
In his maiden state of the nation address on Friday, a day after his election as president by parliament, Ramaphosa also warned of tough decisions to reduce the fiscal deficit and stabilise debt after years of weak growth.
Ramaphosa took over after Zuma stepped down on orders of the ruling African National Congress (ANC) ending nine years of office plagued by corruption allegations and economic mismanagement.
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