Tito Mboweni says 3rd Covid-19 wave may decimate the SA economy

© Gallo Images Tito Mboweni

Cape Town – Finance Minister Tito Mboweni warns that the third wave is on the horizon and said it would be devastating to the economy.

He said the reckless behaviour of some of the people who go partying without adhering to health protocols was a cause for concern.

If the third wave struck the country it would be vicious, he said.

The Gauteng provincial government already issued a similar warning on Friday.

Mboweni’s warning was made in the National Council of Provinces on Thursday.

He said it was important that when the third wave hits the country they should keep the economy going and protect jobs and lives.

“If we do wrong things we will get the third wave.

“If that third wave comes it should be managed (in such a way) that we keep the economy going and protect lives,” said Mboweni.

Mboweni said the speed with which the country rolls out vaccines would help.

On Saturday the country was expecting 60 000 doses of Johnson & Johnson from overseas.

The country has inoculated more than 120 000 health-care workers.

Mboweni also defended his Budget, tabled in February, that it was not an austerity Budget.

Some of the parties said the Budget was an austerity budget.

Mboweni said 56% of the budget went to social services and that was not austerity.

“How do you describe a budget of R2 trillion as austerity.

“Fifty six percent of the budget goes to social services.

“Austerity happens when you begin to cut social services.

“I want to park that austerity thing. It doesn’t exist. It’s an urban legend,” said Mboweni.

Mboweni said he hoped the government and unions would reach an agreement on the wage negotiations.

The unions have tabled a CPI plus 4% at the bargaining chamber in the latest rounds of negotiations.

The unions were involved in a legal battle with the government over the freezing of wages despite the 2018 wage deal.

The matter is now headed to the Constitutional Court.

Mboweni said the wage freeze would save the state billions of rand.

Mboweni said the country would have to continue with the structural reforms if it wanted the economy to grow.

The government has projected a 3% growth this year despite the sharp decline last year after the impact of Covid-19.

The economy has not grown above 5% since 2008 and it has been battling with the jobs bloodbath in various sectors including mining.

But Mboweni said if they implemented structural reforms they would be able to pull through.

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