South African finance minister Enoch Godongwana warned leaders of the ruling African National Congress that the party\u2019s project wish list could cost R73.5 billion ($5.2 billion) and funding it will require difficult trade-offs.<\/p>\n
Big-ticket items that would place pressure on state finances included spending R10 billion on a state bank, Godongwana, who also serves as the ANC\u2019s head of economic transformation, said in a presentation that was delivered to a Sept. 4-6 party meeting and seen by Bloomberg.<\/p>\n
The government will also have to come up with R19.6 billion for increases for state workers, possibly by cutting jobs, and need R4.6 billion to forgive unpaid highway tolls in the central Gauteng province, he said.<\/p>\n
While the ANC is preparing for local government elections on Nov. 1 and needs to show it is doing more to address rampant poverty and record unemployment, it has little room to maneuver as the government contends with surging national debt and limited investment.<\/p>\n
New projects \u201cwill require prioritisation and trade-offs,\u201d Godongwana said. \u201cOur fiscal capacity – as measured by the variation of own tax revenue as a percentage of domestic output \u2013- has been deteriorating.\u201d<\/p>\n
Covid-19, Looting<\/strong><\/p>\n The finance chief also cautioned that the state arms company and agricultural bank will need R8.2 billion of bailouts, while R15 billion rand will be needed to forgive student debt and 16 billion rand for bail outs for provinces that haven\u2019t paid their bills.<\/p>\n The government has already committed to spending R38.5 billion to respond to the ongoing impact of the coronavirus pandemic and a recent spate of riots and rampant looting that left 354 people dead – money that wasn\u2019t previously budgeted for.<\/p>\n Plans to institute a credit-guarantee scheme to support businesses have yet to be properly costed, although the price tag was initially pegged at R5 billion, the finance minister said.<\/p>\n Pule Mabe, the ANC\u2019s spokesman, wasn\u2019t immediately able to comment when called and didn\u2019t respond to a text message.<\/p>\n Godongwana cautioned against forgiving road toll debt, saying the \u201crequest has serious long-term consequences if the user-pay principle is rejected.\u201d<\/p>\n The finance minister called for significant economic reforms to be implemented before President Cyril Ramaphosa presents his state-of the nation address in February.<\/p>\n These include:<\/p>\n Elements of the presentation were reported on earlier by the Johannesburg-based Sunday Times newspaper.<\/p>\n\n
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