EDITORIAL | Budget doesn’t answer the main question: how is SA going to grow?
As long as we are hamstrung by servicing an inordinate amount of debt, economic development will remain static
Finance minister Enoch Godongwana ticked all the right boxes in his delivery of the medium term budget policy statement in parliament, and in doing so carried on the work started by his predecessor Tito Mboweni. He even remarked to journalists that the only difference between him and Mboweni was that he wore better shoes. Maybe, but even with his better shoes, Godongwana had little room to even wiggle his toes, and of course he is eager for all to see that he is indeed walking in Mboweni’s footsteps.
This is no bad thing, at first glance. Mboweni commanded respect internationally, as a regular at the Davos meetings of the rich and powerful, and as a former Reserve Bank governor. Godongwana may be a less colourful figure, and has stayed away from sniping at fellow ÁNC leaders’ weakness for big spending.
But being Mboweni (or in this case Godongwana) is not enough to resolve the deep structural problems besetting SA’s economy. Lately there has been debate among some of SA’s top economists and public policy specialists as to whether SA can afford a permanent basic income grant, given our high rate of unemployment, poverty and inequality. Some have argued we need to borrow more to stimulate growth, but others have warned of a looming debt trap...