The South African government unveils
its mid-term budget Tuesday and it's expected to reflect the effects of the
global economic crisis.
economists say the mid-term budget faces a huge shortfall in tax revenues.
Johannesburg, VOA reporter Delia Robertson says, "South Africa has been hit by
the recession along with the rest of the world.
And so, this time around…the Finance Minister, Pravin Gordhan, is likely
to have to report a deficit in revenue collection by…nearly as much as $12
outlook is much bleaker than when the budget was first introduced in February.
think in February it wasn't quite clear just how deeply the recession was
biting South Africa. But that has become
abundantly clear in the months since then," she says.
What's causing the shortfall?
got a lot to with a shortfall in revenue collection from businesses. The mining industry is down. The manufacturing sector is down. Motor vehicle production sector is down. So these are all major producers in South
Africa," she says.
projected revenue shortfall could change proposed spending plans of the Zuma
makes it extremely difficult for Mr. Zuma and his government to fulfill the
promises they made to the electorate in general elections this year. They also have ambitious plans to introduce a
national health insurance scheme and other initiatives that will require a lot
of money. And it looks like they're
going to have to instead curtail their spending," she says.
World Cup preparations appear safe
all of the work that was planned for the World Cup has already been budgeted.
They money's already been allocated. The
stadiums are almost all complete and will be complete in time. But that money was already available," she
South African government had already invested in rail and road improvements, as
work is already very much underway," she says.
says the projected budgetary problems may not have a large affect on South
Africa's already high unemployment rate.
"I think we've already seen the
impact," she says, "the fact that jobs have been lost. There are signs of a slowdown in that
recession and so…we may have seen the worst of the job losses, but probably
until the end of this year we will continue to see more."
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