According to Prof Raymond Parsons, economist at the North-West University (NWU) Business School, the difficulties and dilemmas facing Minister of Finance Tito Mboweni in the latest MTBPS must be acknowledged, and the credibility of the latest fiscal framework will now largely rest on the extent to which the growth plan and other structural reforms are actively implemented and deliver a better economic performance.

This means that implementation is a collective Cabinet responsibility and cannot rest on the shoulders of the National Treasury only. The credibility factor in fiscal policy now assumes great importance because of the previous poor track record of not meeting fiscal and growth targets.

Prof Parsons added that it is noteworthy that, although Minister Mboweni in this MTBPS seems to draw a fiscal “line in the sand”, the debt ceiling is now further raised and extended over five years. The choices being made with regard to the financing and restructuring of state-owned enterprises (SOEs) like the SAA also do not seem to be supportive of a growth-oriented strategy.

Although the problem of the excessive public wage bill is recognised, the solutions remain open-ended and uncertain. Stricter timelines are needed all around. On the positive side, the emphasis on infrastructural spending and the progress being made with zero-budgeting are key steps in the right direction.

Overall, however, with public debt rising strongly and funds often being diverted into what seems to be low-return projects, it is not evident that the MTBPS in itself will be able to lead job-rich growth in a proactive way.

Several of the practical steps in the official growth plan, together with other structural reforms, should now be visibly implemented to strengthen business confidence. The private sector needs greater encouragement, and a more investor-friendly environment is required to boost growth. For the present, a stable macroeconomic outlook for South Africa is still elusive.