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economic policy fiscal policy

Post-budget column: Fiscal stability just one of many moving parts for ratings assessment

OF LATE, many of our heated national debates have been about money. The Fees Must Fall movement, Nkandla, the influence of the Guptas and many other skirmishes boil down to how government spends the country’s resources. But they are also about the kind of society we want to live in. They are battles about perceptions of equity and economic mobility, of developing human capital and confronting corruption. And in the background is the ever-present gaze of ratings agencies and foreign investors.

Much of the frenzy surrounding this year’s budget is necessitated by policy makers’ need to restore faith in the South African economy. Particular concern stems from the bogeyman of credit downgrades — to junk for foreign-currency instruments and to levels barely above junk for local currency instruments. For a small, open economy reliant on foreign capital, this is an important consideration.

Since ancient times, discussions about creditworthiness and fiscal prudence have often taken on moral tones. Those that live dangerously, overspend must be punished. Austerity must come down upon their profligate heads.

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economic policy fiscal policy political economy

In case you missed it…Pre-budget analysis at CNBC Africa

See what we got right and wrong…

CNBC Africa’s Tumisho Grater spoke to Trudi Makhaya, consulting economist at Mercantile Bank, Professor Christopher Malikane, Associate Professor of Economics at the University of Witwatersrand and Deborah Tickle, the Director of International and Corporate Tax at KPMG for their views.

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fiscal policy small business start-ups

NAFCOC calls for targeted support of small business during the 2016 Budget speech

Press Statement from Nafcoc:

The National African Federated Chamber of Commerce and Industry (NAFCOC) expects the Minister of Finance, Mr Pravin Gordhan to focus on the growth and development of small businesses in his Budget speech on Wednesday 24 February 2016.

In the face of the current economic challenges, NAFCOC calls on the Minister to look at doing away with red tape, and to make sure that the remaining compliance rules are implemented efficiently, with quick turnaround times.

It is our view that the hope of South Africa lies with the small business sector and the Minister of Finance has a perfect opportunity, through the 2016 Budget speech, to halt the escalating economic deterioration by firmly putting the small business agenda in his budget speech.

As a federation of small business organisations with thousands of members all over South Africa, we urge Mr Gordhan to increase the budget of Development Finance Institutions tasked with funding small businesses. He also needs to ensure that National Treasury, with the support other relevant departments such as Department of Small Business Development and DTI, the turnaround time to pay for goods and service provided by small business is quick and on time.

We further propose and expect an increase of tax for High New Worth individuals and companies to finance funding of small businesses and black industrialists in a bid to promote their growth.

Small Business Development Minister Lindiwe Zulu did attribute to the fact that the ripple effect of the crippling economy is being felt the most by small and informal businesses.

The 2016 budget speech should indeed kick start the march of the small business sector from the peripheries to the front lines of economic activity. It should usher an era of radical economic transformation that will create the much needed employment and economic growth.

Lawrence Mavundla

NAFCOC President

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credit rating economic policy fiscal policy Video

The state of the economy

I chat to CNBC Africa a day after the axing of former Finance Minister Nhlanhla Nene. Catch it here

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economic freedom economic policy fiscal policy inequality Uncategorized

Fiscal policy with Ayabonga Cawe and Zwelinzima Vavi

Days before Finance Minister Nhlanhla Nene delivered the national budget, I spoke to Ayabonga Cawe of Rethink Africa and Dalberg; and Cosatu’s Zwelinzima Vavi on the state of fiscal policy. Some enduring insights about inequality, economic policy and the state of South Africa.