Mboweni Says S. Africa Can’t Spend Its Way Out of Low Growth
(Bloomberg) -- South African Finance Minister Tito Mboweni said the country can’t spend its way out of low economic growth and needs to focus on structural reforms.
Mboweni used a newspaper column in Business Day on Tuesday to defend his budget against the criticism of a group of more than 100 left-wing economists who called on lawmakers to reject it in favor of more spending. He also chided the government for failing to implement reforms.
The government should proceed with the sale of additional telecommunications spectrum to lower data costs and allow the launch of new products, he said, citing it as an example of a structural reform that would spur growth.
“The belief that we can spend our way out of low growth is inconsistent with the best available empirical evidence and ignores South Africa’s recent poor performance in using government spending as a tool to unlock much-needed economic growth,” Mboweni said.
“Gambling with our future on risky economic strategies that have failed elsewhere is something we are not prepared to do.”
Mboweni is facing a deadline today to commit to funding a rescue plan for the bankrupt state airline, South African Airways. He has repeatedly expressed a reluctance to do so.
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