South Africa should consider zero-based budgeting, finance minister says


CAPE TOWN (Reuters) – South Africa should think about moving to a zero-based budget, the finance minister said on Friday, ahead of an emergency budget dealing with the economic impact of the COVID-19 pandemic.

Finance Minister Tito Mboweni is expected to unveil a major shake-up in spending and revenue forecasts for the recession-hit economy when he tables a supplementary budget pencilled in for June 24.

“We have to adapt to the new situation. A new situation in my view … requires that we think seriously about going to zero-based budgeting,” Mboweni said during a debate on the 2020 budget appropriation bill, which was passed.

Under zero-based budgeting, all expenses must be justified for each new period. Currently, the National Treasury provides budget forecasts for up to three years ahead.

Mboweni said the new approach would allow the government to refocus attention on growth-enhancing initiatives and that it could “no longer take for granted that the baseline that was there last year will always be the case”.

Africa’s most industrialised economy was in bad shape before the COVID-19 pandemic struck.

A strict nationwide lockdown from late March severely curtailed production across key sectors like mining and retail, with the central bank predicting a gross domestic product contraction of 7% this year.

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