This has helped in terms of revenues, but there are a couple of things that we’re not going to have moving forward. I think I had already mentioned there’s been the commodity boom. We think that he’s going to have to revise the budget deficit and there are a couple of reasons for that. The Budget deficit will have to be revised The mid-term budget speech would give us a clearer picture of that, as has been the case in the previous financial year. So, the government and the ruling party is going to be under some serious pressure to come to the negotiation table. Particularly with the public wages, we’re going to have an election year in 2024 and there’s going to be increased pressure, particularly from alliance partners such as COSATU to ensure that there is some sort of being taken care of by the public sector to get the support necessary in those elections. But this is how it began at the beginning of last year’s budget speech and by the time we got to the midterms, the minister had to look at where the demands are, had to assess whether or not they were worth spending on and ended up spending about another R30 billion towards SOEs, 24 of those went towards Sanral and then some went towards Denel and others towards Transnet and so on. We don’t think that in this budget there’s going to be more expenditure towards SOEs. No money for other SOEs or public wages but concession in mid-term budget policy statement So, those are positives, probably the best that we can see. The fact that we’ve got about 1.2 million jobs that have come up and this is really great, having lost 2 million due to COVID, and that speaks to the infrastructure sector more than anything else, being one that’s beginning to drive some economic recovery. And so, we are unlikely going to see an increase in taxes. What this would like to do is ensure that we don’t see increased corporate taxes because there’s this unexpected windfall from these great revenue collections. We also saw that as a result of the commodity boom, the efficiency of the South African Revenue collection services (SARS) increased and that’s a positive in terms of revenue. The mining sector helped to spruce that up. We got about R20 to 30 billion more than we anticipated and a big reason for that was because of the commodity boom in 2020 and 21. The revenue collection has been great, and that’s a positive. I think the structural issues are real, and there’s really nothing too surprising to come out of it. I do think that we may not see positive surprises. The positives: Revenue collection and 1.2 million jobs And while the timing of a naval exercise with Russia and China was unfortunate while Ukraine marked a year since the Russian invasion, Sobekwa did not expect it to damage relations with the West. He expected the minister to say that he would not dish out more money to SOEs or salary increase, but that resolve could disappear down the road. Eskom was not the minister’s only headache, he said, problems with water supply and fuel costs were expected to impact growth. Sobekwa said there were positives in terms of revenue collection and the number of jobs that had been created but said that the budget deficit would have to be revised. Nezo Sobekwa from S&P Global told Biznews that investors would be looking at how the finance minister would be spending more money on Eskom debt, how he dealt with the public sector wage bill and what the country’s GDP growth prospects were. Our partners cannot pay us to guarantee favorable reviews of their products or services.In a week that has seen another round of Stage 6 loadshedding with whispers of a dreaded Stage 8, Finance Minister Godongwana faces the task of incorporating a credible debt-relief plan for Eskom, while stabilising government finances in his annual budget, to be presented on Wednesday, 22nd February. Our editorials are grounded on independent research. We are compensated by our partners, which may influence which products we review and write about (and where those products appear on our site), but it in no way affects our recommendations or advice. Our site doesn’t feature every company or financial product available on the market.
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