S Africa-Budget Speech/Zuma

Concern grows over possible delay of budget speech due to Zuma's exit

  • English

Shotlist


FILE: S Africa - Exact Location and Date Unknown (CGTN - No access Chinese mainland)
1. Various of incumbent South African President, Jacob Zuma, at conference

S Africa - Recent (CGTN - No access Chinese mainland)
2. Newspaper article about political, economic situation

Johannesburg, S Africa - Feb 12, 2018 (CGTN - No access Chinese mainland)
3. SOUNDBITE (English) Lumkile Monde, senior lecturer, School of Economic and Business Sciences, WITS University:
"The development of the project will be compromised in various ways should President Zuma not move, because it will signal for the ANC that the ANC is so weak that it cannot deal with one problem. So, how much can it deal with the national problems whether it's poverty or unemployment?"
4. SOUNDBITE (English) Kevin Lings, chief economist, Stanlib Asset Management Ltd.:
"If the government were to postpone the budget and not give a clear indication of when it's likely to be delivered, that would be seen as a negative outcome by Moody's. Clearly Moody's is placing a lot of weight on the next budget in South Africa as to whether they act on the credit watch they put South Africa under."

FILE: Cape Town, S Africa - Exact Date Unknown (CGTN - No access Chinese mainland)
5. Various of conference in progress

FILE: S Africa - Exact Location and Date Unknown (CGTN - No access Chinese mainland)
6. Street scene

Johannesburg, S Africa - Feb 12, 2018 (CGTN - No access Chinese mainland)
7. SOUNDBITE (English) Lumkile Monde, senior lecturer, School of Economic and Business Sciences, WITS University:
"Remember, all the ministers have to come back to Parliament for their votes to be voted. They can not spend without a parliamentary process. So, in that regard, it could impact on service delivery. Anything up to mid-March should be okay. Anything after mid-March could be dangerous, because then if the minister's budget is not voted, they can't spend in that department."

FILE: S Africa - Exact Location and Date Unknown (CGTN - No access Chinese mainland)
8. Various of conference held by Moody's Investors Service in progress

Johannesburg, S Africa - Feb 12, 2018 (CGTN - No access Chinese mainland)
9. SOUNDBITE (English) Kevin Lings, chief economist, Stanlib Asset Management Ltd.:
"Out of all the budgets in the last couple of years, this is the most critical, the most watched and it has huge implications for South Africa's international investor perception. So, even delaying that budget by a week would raise some concerns."

FILE: S Africa - Exact Location and Date Unknown (CGTN - No access Chinese mainland)
10. Various of South African President Jacob Zuma at conference
11. Official participating banquet


Storyline


The latest pronouncement from South Africa's ruling African National Congress (ANC) party, that President Jacob Zuma should leave office immediately, has aroused concerns whether the budget speech scheduled for next week will still be on track.

Mounting international concern has come about after national events, including the annual State of the Nation Address to parliament, were canceled with no rescheduled date announced.

As the president has until Wednesday to respond to the ANC's decree, experts are worried that the possible postponement might damage the ANC's credibility.

"The development of the budget will be compromised in various ways should President Zuma not move, because it will signal for the ANC that the ANC is so weak that it cannot deal with one problem. So, how much can it deal with the national problems whether it's poverty or unemployment?" said Lumkile Monde, a senior lecturer from the School of Economics and Business Sciences at Witwatersrand (WIT) University.

Amid these developments, it's not clear whether the budget will be announced on Feb. 21, as was previously planned.

Analysts are warning that any delay could have serious consequences for the economy.

"If the government were to postpone the budget and not give a clear indication of when it's likely to be delivered, that would be seen as a negative outcome by Moody's. Clearly Moody's is placing a lot of weight on the next budget in South Africa as to whether they act on the credit watch they put South Africa under," said Kevin Lings, the chief economist from Stanlib Asset Management Ltd., one of the top investment management companies in South Africa.

In his statement, Lings was referring to Moody's Investors Service, the only one among the three main global credit-rating agencies to review South Africa's credit status.

The previous budget was presided over last year by Mr. Zuma and it outlined funding allocations for government departments to function, thus delays in passing the new budget could heavily impact the delivery of government and public services.

"Remember, all the ministers have to come back to Parliament for their votes to be voted. They cannot spend without a parliamentary process. So, in that regard, it could impact on service delivery. Anything up to mid-March should be okay. Anything after mid-March could be dangerous, because then if the minister's budget is not voted, they can't spend in that department," stressed Monde.

Ratings agencies are also watching closely for signs of improvement in South Africa's precarious economic landscape.

"Out of all the budgets in the last couple of years, this is the most critical, the most watched and it has huge implications for South Africa's international investor perception. So, even delaying that budget by a week would raise some concerns," added Lings.

The ANC President-elect, Cyril Ramaphosa, is mindful of the consequences of delaying the budget and he does not want another downgrade of South Africa's credit either, especially after trying to convince investors at the World Economic Forum that the country is open for business.

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  • ID : 8073630
  • Published : 2018-02-14 21:40
  • Last Modified : 2018-02-15 05:47:14
  • Location : Johannesburg,South Africa
  • Category : economy, business and finance
  • Duration : 1'57
  • Audio Language : English/Nats
  • Source : China Central Television (CCTV)
  • Restrictions : No access Chinese mainland
  • Version : 3
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