The date for the mid-term budget policy statement has been changed again from October 30 to October 29 in order to accommodate President Cyril Ramaphosa’s schedule.
This announcement was made on Thursday morning by Finance Minister Tito Mboweni during his opening remarks for the third colloquium on the South African economy in Pretoria.
Mboweni informed journalists that Treasury had initially pushed back the date to October 30 from the 23 to align it with Ramaphosa’s engagements but the President will not be in the country at the time.
“We are saying this to avoid any rumour-mongering in the market,” said Mboweni.
Economic strategy paper
Mboweni called the third colloquium to discuss the updated economic strategy paper released by Treasury in August entitled, ‘Towards a growth agenda for the South African economy’.
Those present at the meeting included Deputy Minister David Masondo, Director-General Dondo Mogajane, members of Ramaphosa’s council of economic advisors, prominent economists and academics and senior government officials.
Mboweni explained that the meeting was an opportunity to “get a final bite” in finalising the paper and preparing for the MTBPS.
The final economic strategy paper is expected to be presented together with the mini-budget said Mboweni.
The much-contested paper received over 700 comments from the public.
“We should have anticipated that there was going to be a massive response to the document,” said Mboweni. “It was satisfying that for a number of days and weeks at least the country was in the conversation about an economic strategy”.
The paper which largely draws on aspects of the National Development Plan and other government policies received mixed responses from the public, including major opposition the African National Congress’s (ANC) alliance partners.
Union federation Cosatu and the South African Communist Party were against the labour reforms proposed in the paper and complained about the manner that Treasury released the paper without consulting.
Treasury officials have assessed the public comments and Mboweni made it clear that the final economic strategy paper would not incorporate ideas which were not “internally consistent” with the policy framework.
In his examples, Mboweni, who is a former governor, reaffirmed the mandate of the South African Reserve Bank (Sarb), whose focus on inflation targeting has come under fire by factions within the ANC after the party’s national conference on 2017 made a resolution to nationalise the Reserve Bank and broaden its mandate.
“Somebody who says in order to get the economy going the economic strategy must say we must abandon inflation targeting, that is internally inconsistent with what we are trying to do,” he said.
“Or somebody who says, ‘the National Treasury must instruct the Sarb to cut interest rates by 200 basis points, that is inconsistent with our mandate, we can’t do that,” he added.
Road to MTBPS
Mboweni and the Treasury team will finalise the document over the weekend as well as go through the MTBPS.
Afterwards Mboweni will convene a meeting with the cabinet, which he said will be between October 24 or October 25.