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Dear Bongani

The success and failure of governments depend on sound governance. Economic performance and the quality of institutions provide a barometer for governance and determine a country’s long-term vitality. South Africa is confronted with many challenges today. These reflect the character of our institutions, the state of governance, and the performance of our economy. The public mood is subdued as we are not at our best as a country.

The past decade has left us with battered institutions and a weak economy. Badly managed state-owned enterprises, and some of which have been riddled with corruption scandals, operational failures, and depleted balance sheet, have been a drain on the fiscal resources. These continue to pose a grave risk for fiscal stability and will be on the sight of credit rating agencies.

In this special edition of the newsletter, we take a closer look at the Budget Vote delivered by the Minister of Finance, Tito Mboweni. Mzukisi Qobo and Heinrich Krogman reflect on the key priorities of the budget and underline some of the key steps required to get the economy out of the doldrums. There is an emerging consensus that Minister Mboweni did a good job under the circumstances. He deftly trod a delicate balance between redistributive thrust and predisposition towards belt-tightening.

Given that we are in an election year, it was not surprising that he was vague on details around the restructuring of Eskom and other state-owned enterprises. In this edition, Lesley Wentworth, and Azwimpheleli cast a sharp spotlight on the challenges facing Eskom including the political minefield that government will have to navigate to turn around Eskom.

We hope you enjoy this edition and give us feedback. At Tutwa we strive to bring you the best of analysis on developments in South Africa, the broader African continent, and the world. We would like to stay in touch with you.

Please write to us at info@tutwaconsulting.com

The ideal conditions for an “aloe ferox” economy

Mzukisi Qobo and Heinrich Krogman
Following the State of the Nation Address, expectations were for Finance Minister Tito Mboweni to address two critical issues during the budget speech: how the government intends to improve South Africa’s sluggish economic growth and how it will address the intensifying fiscal risks posed by state-owned enterprises (SOEs). In a spirited performance fuelled by gardening …
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Will Tito Mboweni’s tap dance around Eskom and the public wage bill save us from junk status?

Azwimpheleli Langalanga and Lesley Wentworth
Setting up the Finance Minister Tito Mboweni's "Eskom Reconfiguration" narrative in yesterday's Budget Speech 2019, President Ramaphosa during his State of the Nation Address, announced a “clear and executable plan for electricity”. This effectively implied the unbundling of Eskom into separate and independently run units: Generation, Transmission, and Distribution divisions. Way back in 2001, in …
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