Published: Sun, February 25, 2018
Entertaiment | By Minnie Bishop

Ramaphosa confident budget will help SA

Ramaphosa confident budget will help SA

Although one of the key initiatives of Jacob Zuma's presidency, little has truly been achieved through Operation Phakisa; but President Ramaphosa now has an opportunity to breathe life into economic development opportunities at sea.

"The decision on Value-Added Tax was not an easy decision, " Gigaba said in an interview after delivering his Budget Speech to Parliament in Cape Town on Wednesday.

At 0655 GMT, the rand traded at 11.75 versus the dollar, 0.17 percent weaker from its overnight close in NY.

Much of the blame for the state of the economy has been laid at the door of Zuma and his allies.

The first increase in the sales tax since 1993 comes just over a year before national elections and could backfire on the African National Congress because it will affect its largely poor and middle-class supporters. Mr. Gigaba has denied wrongdoing.

Treasury officials spoke to analysts at Moody's and S&P on Wednesday and they were positive about the budget, said Monale Ratsoma, the deputy director general for economic policy.

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South Africa's finance ministry said it was set to spell out "tough decisions" in its 2018 budget to be presented before the Parliament today.

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"The budget was probably enough to avoid another downgrade, at least for now", said John Ashbourne, Africa economist at Capital Economics in London. While opposition parties have concerns about the contents of the budget speech and who is delivering it. "Gigaba must resist the temptation to plug the massive budget hole by reaching into the pockets of ordinary South African people, especially the poor". "What we saw today is a outcome of nine years of mismanagement of the economy by the ANC".

Ramaphosa reiterated in a speech to parliament that expropriation of land without compensation should be done in a way that improves food security and agricultural output. It demanded that Gigaba, a Zuma ally, be removed.

Finance Minister Malusi Gigaba announced South Africa will raise an estimated ZAR 36 billion in the current year from VAT tax increases, through a 1% increase in the VAT rate, and below inflation adjustments to payroll tax brackets for workers.

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