- Minister of Finance Enoch Gondogwana told the governing party that huge sacrifices will need to be made to fund new projects
- Gondogwana estimated that the party's new ventures will cost approximately R73.5 billion which will put a strain on the country's budget
- The Finance Minister stated that South Africa's fiscal capacity is on the decline and is impacting how much revenue comes in
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JOHANNESBURG - The Minister of Finance Enoch Godongwana has informed the African National Congress that their plans to implement new projects will necessitate tough trade-offs.
Godongwana stated at an ANC meeting that the projects would cost approximately R73.5 billion would put immense pressure on the state's budget and could also mean that R10 billion would need to be spent on a state bank.
According to BusinessTech, Godongwana gave the party leaders a presentation in which he stated that R19.6 billion is needed for the government to be able to increase the salaries of state employees, he said that could mean that jobs may need to be cut.
Godongwana who is also the ANC's head of economic transformation indicated that R4.6 billion will be needed to forgive highway tolls debt in Gauteng that have not been. He also warned that forgiving this debt would have serious consequences.
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Other areas that need funding include forgiving student debt which will cost R15 billion, R8.2 billion in bailouts for the state-owned arms firm and agriculture bank, and provinces that have been struggling to pay their debts will need R16 billion, according to TimesLIVE.
Godongwana added that the country will spend R38.5 billion to deal with the coronavirus pandemic as well as the aftermath of the social unrest that took place in July. He explained that the government initially did not budget to spend this amount.
The government still needs to budget for a credit-guarantee scheme to help businesses, the initial budget was R5 billion.
He explained that the new projects will require trade-offs because the country is currently now getting enough revenue because the fiscal capacity is on the decline.
Finance Minister Enoch Godongwana wants youth to work not rely on handouts
Briefly News previously reported that Newly minted Finance Minister Enoch Godongwana has plans for South Africa that include helping young people to find work.
He would prefer that young people find employment than rely on government handouts such as the Basic Income Grant (BIG).
Godongwana is aware of the political tightrope he is going to have to walk in order to take over from Tito Mboweni. The BIG is seen as essential by many in the ANC for post-Covid-19 recovery according to Business Live.
Gondongwana took over from Tito Mboweni, who had asked the president if he may step down from the position.
According to Fin24, Gondongwana is regarded as a pragmatic economic voice and seems to be trusted by most for the position of leading the National Treasury. He is the current Development Bank of Southern Africa head as well as the head of the ANC’s economic transformation committee.