South African President Cyril Ramaphosa, has revealed more details on his government’s plans to fix the country’s ailing economy and precarious public finances, saying Finance Minister Tito Mboweni will deliver more details in his 2020 Budget Speech at the end of the month.
Delivering the State of the Nation Address (SONA 2020) to the joint sitting of the National Assembly and the National Council of Provinces in parliament, President Ramaphosa, said the government would establish a sovereign wealth fund so that the country’s people could share its wealth from natural resources.
He added the government was going ahead with establishing a state-owned bank so that more South Africans could have access to financial services.
Ramaphosa said more details on these plans and steps to fix the country’s precarious public finances and economy would be announced by Minister Mboweni when he delivers his Budget Speech.
Africa’s second largest economy has posted low economic growth for several years in the last decade and this has meant that not enough tax revenue to cover government spending is being collected, sending debt levels soaring.
Ramaphosa said too much state spending was on consumption and interest on debt, rather than investments in infrastructure.
“We cannot continue along this path nor can we afford to stand still,” he noted.
The Head of State added that Mboweni would outline steps to cut government spending and make it more efficient in his Budget Speech later this month.
“We are engaged with labour and other stakeholders on measures we need to take to contain the public wage bill and reduce wastage,” he said.
Ramaphosa said that a key priority for this year was fixing commuter rail services, with R1.4bn to be invested in both Cape Town’s Central Line and Pretoria’s Mabopane Line.
