Barely two weeks into his job, Mboweni faces formidable obstacles to finding nearly $3.5 billion for a stimulus package and reassuring investors that the South Africa government is capable of hauling the economy out of recession. The country faces a range of economic woes, including an enormous and expanding debt, high unemployment, struggling state-run businesses and dwindling revenues.
It is widely expected that Mr Mboweni’s Medium Term Budget Policy Statement will announce a budget shortfall. Analysts have forecasted this shortfall to be at least 3.6%. However, according to other economists, anything above the very possible marker of 4% would hurt the rand.
The future of South Africa depends on how well the new finance minister’s stimulus package and intended reforms will revive the struggling economy. By the next major budget announcement, if agriculture, infrastructure and job creation are not improved, it is likely South Africa will face a shortfall of well over 4% and consequently a significant blow to the rand and further recession.
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Nick is the Director of the Daily Brief and a contributing Senior Analyst to it. An attorney, his areas of expertise include international law, international and domestic criminal law, security affairs in Europe and the Middle East, and human rights.