…To stop government-issued cellphones for public servants

…Ministers, MECS, Mayors to travel economy class on local trips

South Africa Finance Minister, Tito Mboweni. PHOTO: EWN

South Africa’s Finance Minister, Tito Mboweni during the mid-term budget speech was reported to have related measures the government is taking to ensure its economy does not get caught up in a debt trap.

Mr Mboweni told the SA’s MPs the country is spending more than its earn, and if nothing is done, it might worsen South Africa’s unemployment crisis.

South Africa’s unemployment rate currently stands at 29.1 per cent – its highest rate in over 16 years. Nigeria unemployment rate based on 2018 report stands at 23.1 per cent.

Observing the consecutive increase in the country’s debt, Mr Mboweni said the country will be spending more to service its debt than it does on public health care.

“The consequences of not acting now would be gravely negative for SA. Over time, the country would likely face mounting debt service costs and higher interest rates and may enter a debt trap.

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“The unemployment crisis will worsen and government debt could balloon. This is an outcome we are determined to avoid,” Mr Mboweni said, according to South Africa’s Times Live report.

South Africa’s spending was reported to be dominated by education and social grants as they account for 48 per cent of the government’s spending.

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The strategy listed by the finance minister to service the debt according to SA’s Times Live include:

• Stopping government-issued cellphones for public servants
• Containing the wage bill through lower-than-inflation increases
• reviewing occupation-specific dispensation allowances
• freezing the salaries of ministers, MECs and mayors
• Forcing government officials to travel economy class on local trips

When the government unveils a hard-times budget, officials usually take steps to show that they will share the pain with fellow citizens, Bloomberg analysis noted.

Vanguard News Nigeria.