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SA’s economic green shoots

You may have not noticed, but lately, the economy has been behaving pretty well. South African Reserve Bank Governor Lesetja Kganyago, in his monetary policy review on Tuesday, said the country is experiencing an economic boom largely driven by commodities, resulting in tax overruns (read: more cash in the state’s purses), as well as stronger GDP growth over the past year. But he said the government should not get too excited by these temporary gains and enter into commitments that it cannot fund at a later change. 😬. It’s a bit like getting a temporary cash windfall: don’t change your entire budget around it! Commodity prices fluctuate so there’s no way to say that this gain is sustainable. We’ll hear more about the government’s financial standing in the medium-term budget policy statement, set to be presented by the new finance minister Enoch Godongwana on 4 November. 

We’re betting on Godongwana to do the right things: he’s already saying them and getting people excited about our economic prospects. 😌 During the Sunday Times investment summit last week, he touched on five key priority areas: energy security outside of Eskom, broadband spectrum, the green revolution, our logistics issues and opening more space to make it easy to do business. Busi Mavuso, the CEO of Business Leadership SA, sang Godongwana’s praises in Business Day. We’re optimistically cautious: after all, previous finance minister Tito Mboweni also made all the right noises, but was ultimately frustrated by politics. Godongwana, however, has more clout in the ANC. Let’s hope his clear-sightedness prevails. 🌱

This article appeared as part of The Wrap, 7 October 2021. Sign up to receive our weekly updates.

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