MTBPS 2021: An opportunity to inspire confidence

9 November 2021

The Minister of Finance, Enoch Godongwana, will deliver his first maiden Medium Term Budget Policy Statement (MTBPS) on Thursday 11 November. The statement is aimed at providing an update on the projected fiscal policy direction in the medium term (three fiscal years).

“We are expecting the statement to be underpinned by two main themes,” says Kulani Siweya, Agri SA agricultural economist. “The first is the rate of fiscal deterioration being abated markedly, brought on by the commodity price windfall boosting revenue, and the positive impact on the fiscal ratios of higher nominal GDP post-Stats SA’s benchmarking/rebasing exercise. The second theme expected is the precarious debt outlook, though it does come at a better starting position.”

Whilst these may be positives in the short term, there is still some caution that we have on the long-term view, Siweya warns, particularly when considering that many structural challenges remain.

“Some of the things we will be looking out for include sentiments around State Owned Entities and if there are any unbudgeted bailouts, as well as National Treasury’s resolve to restrain spending. We believe that these, amongst others, will either set us on a trajectory of turning the tide around entirely or we will see more of the same from the new incumbent and his team.”

Siweya says that, ultimately, this week’s medium-term statement should inspire confidence once again from various spheres. “This is sorely needed in a time where investment in infrastructure has been on the decline and inclusive growth is now an imperative that’s non-negotiable.”

Issued by Kulani Siweya, Agri SA Agricultural economist, 9 November 2021