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'Treasury is keeping to its word and business is starting to regain trust'

23 November 2021 8:13 PM
Tags:
ANC
National Treasury
Social grants
The Money Show
Fiscal Crisis
Bruce Whitfield
Business Leadership South Africa
Economic policy
BLSA
Busi Mavuso
economic recovery

"I'm hoping that Treasury will get more support from political parties." Bruce Whitfield interviews BLSA CEO Busi Mavuso.
© bondsza/123rf.com

The prospect of a serious fiscal crisis South Africa faced in at least the last two years is diminishing, writes CEO Busi Mavuso in her weekly newsletter for Business Leadership South Africa (BLSA).

Mavuso says National Treasury is keeping its word, and business is starting to regain trust.

"The medium-term budget policy statement two weeks ago showed more evidence that debt is being brought under control and that Treasury is keeping a firm hand on spending."

RELATED: 'Treasury must act responsibly so future generations not burdened by SA's debt'

Bruce Whitfield interviews the BLSA CEO on The Money Show.

We're so deep in trouble, but less deep perhaps than we were 12 or 18 months ago?

Bruce Whitfield, The Money Show host

That is precisely the message that we're trying to drive. We are concerned, as business, about the mounting pressure on National Treasury to open the taps particularly on welfare spending, but we are very pleased that Treasury is keeping to its word.

Busi Mavuso, CEO - Business Leadership South Africa

Business is starting to regain trust... I think what National Treasury has done is critical... ensuring that we actually keep our fiscal standing very tight.

Busi Mavuso, CEO - Business Leadership South Africa

The imposition of the wage restraints on civil servants is actually necessary, and National Treasury is just going to have to ensure that they keep on doing that.

Busi Mavuso, CEO - Business Leadership South Africa

She also points out that lenders are concerned about the country's ability to service debt while revenue is shrinking.

Investment is also difficult without confidence that government will continue to have access to a well-functioning bond market with reasonable costs of debt.

Busi Mavuso, CEO - Business Leadership South Africa

I'm actually very glad at what we are seeing playing out in the provincial government after the municipal elections... with the leadership that is actually been put in place... If that can escalate with the national elections to national Cabinet, I think we can really start seeing some changes.

Busi Mavuso, CEO - Business Leadership South Africa

I think our biggest weakness as a country is precisely that we are sitting with a Cabinet that is dominated by the ANC, an ANC that is self-mutilated, that doesn't have a united vision in terms of what the economic prospects for South Africa ought to be or where we are driving the country.

Busi Mavuso, CEO - Business Leadership South Africa

She says it is interesting that the pressure Treasury is facing comes not from outside, for example from the EFF or the DA, but from the ANC-led government itself.

I'm hoping that Treasury will have more support from political parties putting pressure that we actually have to hold the line when it comes to fiscal discipline. That is the only chance we have as a country to actually show our international stakeholders... investors, lenders... that we are serious about fiscal consolidation.

Busi Mavuso, CEO - Business Leadership South Africa

Mavuso also highlights the balancing act required to pay attention to growth interventions that will allow the acceleration of critical social reforms and the absorption of the country's unemployed.

Giving people grants is a means to an end. It can't be an end in itself! People are not looking for grants, they are looking to have meaningful jobs so that they can sustain their families.

Busi Mavuso, CEO - Business Leadership South Africa

If we give in to the pressure on social welfare in particular, I think we are going to be a goner... I do understand that it is important that we take care of our indigent... but let's also understand that we have a serious balancing act that we have to play as a country.

Busi Mavuso, CEO - Business Leadership South Africa

Listen to Mavuso's argument on The Money Show:




23 November 2021 8:13 PM
Tags:
ANC
National Treasury
Social grants
The Money Show
Fiscal Crisis
Bruce Whitfield
Business Leadership South Africa
Economic policy
BLSA
Busi Mavuso
economic recovery

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