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South African Finance Minister Enoch Godongwana’s job just got harder, with calls for more defense spending further testing his ability to present a prudent budget next week.
The recent deaths of South African troops who were part of a peacekeeping mission in Democratic Republic of Congo have sparked calls for the military to get more cash.
They add to other demands on the public purse, including a civil-service pay deal that will cost more than Godongwana anticipated.
“Many people have said, clearly, we need to increase our defence budget,” Xhanti Payi, economist at Pricewaterhouse Coopers, told reports in Johannesburg Wednesday. So we are concerned that the finance minister will have to do something about that.”
Godongwana wants his budget, which he will deliver in Cape Town on February 19, to show that fiscal discipline from the country’s new coalition government is helping stabilise high public debt.
But PwC expects revenue to be R10 billion (US$542 million) less than the R2,02 trillion the Treasury forecast in October due to weaker-than-expected value-added tax receipts. And Godongwana’s task of keeping spending in check has been further complicated by the government’s 5,5 percent public-sector pay offer, higher than the 4,5 percent he pencilled in for the 2025-26 financial year.
“That’s another slippage that we are looking to see this year,” said Payi, who envisions the pay offer adding to demands from other quarters, including the country’s struggling municipalities, where faltering public services have spurred public anger. — Bloomberg.
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