Budget Speech | Godongwana expected to focus on measures to deal with load shedding

Finance Minister Enoch Godongwana will have the unenviable task of balancing rising spending pressures amid lower economic growth, made worse by the intense load shedding. This is when he presents the national budget on Wednesday.

The intensified rolling blackouts will negatively impact economic growth as well as revenue collection, which is hit by a lack of business profitability.

It is expected the budget deficit will widen as expenditure pressures rise and less revenue is collected.

Senior Economist at Absa Peter Worthington says; “One of the big issues is of course is the intensified load shedding that the economy is labouring under. It is going to have an impact on the fiscus, it will slow the growth of the economy and that is not good news for tax receipts in general. But also what we are observing now is that a lot of businesses are spending money on back up diesel generation and that is going to hurt the bottom line, the profitability of these businesses and it is going to hurt the tax receipts that they are contributing into the state.“

Worthington says the support package to cushion households and businesses that President Ramaphosa promised will be one of the key areas of focus of the budget: 

On Sunday, the power utility announced that the country will be on Stage 6 load shedding after breakdowns at eight generation units. Briefing the media on Monday the embattled power utility said the electricity system remains highly constrained and unreliable.

Eskom uses diesel to power turbines that are used as a back-up to its coal fired power stations

Outgoing CEO, Andre De Ruyter, said they hope to reduce blackouts to stage four by Thursday: