Speaking to Channel Africa, Mathekga said the recent budget deadlock, the first in 30 years of democracy, underscores deep divisions within the ruling coalition and reflects a wider failure to address the country’s structural economic challenges.
Mathekga pointed to the government’s continued reluctance to revise spending priorities, particularly in the face of mounting debt and sluggish Gross Domestic Product growth.
“We’ve struggled to break past the 1% mark in economic growth. Projections might suggest 2.5%, but reality keeps pulling us back,” he explained. “The fundamentals are not being addressed, we’re sticking with an outdated fiscal framework that has clearly failed.”
One major concern is the government’s inability to control expenditure, especially on the public sector wage bill, while also failing to implement meaningful reforms. Mathekga warned that growth below population levels spells long-term trouble, with a shrinking tax base and increasing pressure on social spending.
While the National Treasury’s recent decision to reverse a proposed Value-Added Tax (VAT) increase has been welcomed by some, Mathekga believes it does little to inspire investor confidence.
“A tax increase doesn’t attract investment. SA is already seen as a high-tax jurisdiction among emerging markets,” he said, adding that restrictive policies and uncertainty over Black Economic Empowerment regulations further dampen the investment climate.
Mathekga also raised alarm over rising debt levels, compounded by loans taken during the COVID-19 pandemic. “We’re spending more on debt servicing than on infrastructure. That’s not sustainable,” he warned.
He criticised the government’s failure to adapt, noting that some political parties have rightly refused to back the budget due to disagreements over spending priorities. “It’s not just about objecting to VAT, it’s about rejecting a business-as-usual approach that’s leading us nowhere,” he said.
Mathekga called for a fresh, inclusive economic direction, “We need a renewed sense of urgency, one that listens, adapts, and genuinely aims to do things differently.”
--ChannelAfrica--
