Moody’s downgrade: Mboweni should table urgent new budget after lockdown
28 March 2020
The decision by Moody’s to downgrade South Africa’s credit rating to junk is largely explained by two things: The government's inability to get our national debt under control, and its inability to reform the electricity sector to allow for competitive generation. Our economic outlook is definitely worsened by the current Coronavirus crisis, but this is not the primary cause of this downgrade.
We believe that as soon as the current national lockdown is over, Finance Minister, Tito Mboweni should table a new, emergency budget in Parliament.
This is necessary now, as none of the revenue and growth assumptions on which the February budget was based still survive. Revenue and growth projections are collapsing.
The Minister should see this as an opportunity to table an entirely new budget which lays the groundwork for a recovery once this crisis is over, and more importantly, fundamentally changes South Africa’s economic trajectory.