Finance Minister Enoch Godongwana is set to table his annual budget speech on February 21.
Ahead of the 2024/25 budget speech, accounting firm PwC shared its budget predictions and wishes in regards to South Africa’s sovereign credit ratings.
PwC wishes
The PwC report said that the outlook on South Africa’s sovereign credit ratings are currently stable, according to all three major ratings agencies.
However, S&P Global Ratings warned last year November that it could lower South Africa’s rating if the implementation of economic and governance reforms does not go ahead as planned, resulting in the deterioration in economic growth, or higher than expected fiscal financing needs.
According to the report, the 2024/2025 budget would be a good opportunity for the finance minister to reflect on the progress made by reforms under Operation Vulindlela.
Godongwana should also share in his budget speech what is being done to reforms that are facing significant challenges and need intervention.
This includes:
– improving the efficiency of ports
– implementing third party access to the freight rail network
– updating and modernising the mining rights system
– a review of the fuel price formula.
PwC prediction
The budget speech usually makes limited reference to credit ratings. However, this would be the perfect time for the finance minister to highlight any progress made in the key areas observed by ratings agencies, as they assess sovereign ratings.
The budget speech should also serve as an opportunity to reflect on some good news around public sector finances.
IOL Business