It's now almost a week since South Africa postponed its State of the Nation address, amid the uncertainty about President Zuma's future. A new date has yet to be announced. There's also concern that the National Budget speech might very well be delayed. Sumitra Nydoo takes a look at the consequences of a possible deferment.
2018 will go down in history for all things unprecedented. The state of the nation address has never been postponed before. President Jacob Zuma has been asked to leave office immediately.While the budget speech is still on track, the ANC's latest pronouncement could cause an upset in the schedule.
LUMKILE MONDE, SENIOR LECTURER SCHOOL OF ECONOMIC AND BUSINESS SCIENCES, WITS UNIVERSITY "The delivery of the budget will be compromised in several ways should President Zuma not move because it will signal for the ANC that the ANC is so weak, that it cannot deal with one problem. So, how can it deal with national problems whether it's poverty unemployment."
SUMITRA NYDOO JOHANNESBURG, SOUTH AFRICA "Even with the latest developments it's not clear whether the budget will go ahead as planned on the 21st of February. Analysts are warning that any delay could have serious consequences for the economy."
KEVIN LINGS CHIEF ECONOMIST, STANLIB "If the government were to postpone the budget and not give a clear indication of when it's likely to be delivered that would be seen as a negative outcome by Moody's. Clearly Moody's is placing a lot of weight on the next budget in South Africa as to whether they act on the credit watch they put South Africa under."
The budget was placed under the presidency last year. It outlines funding allocations for government departments to function. Delays could impact on service delivery.
LUMKILE MONDE, SENIOR LECTURER SCHOOL OF ECONOMIC AND BUSINESS SCIENCES, WITS UNIVERSITY "Remember, all the ministers have to come back to Parliament for their votes to be entered. The can not spend without a parliamentary process. So, in that regard, it could impact on service delivery. Anything up to mid-March should be ok. Anything after mid-March could be dangerous because if the minister's budget is not voted, they can't spend that budget."
Ratings agencies too are watching closely for signs of improvement in the economic landscape.
KEVIN LINGS CHIEF ECONOMIST, STANLIB "Out of all the budgets in the last couple of years. This is the most critical, the most watched and it has huge implications for South Africa's international investor perception. So, even delaying that budget by a week would raise some concerns."
ANC President Cyril Ramaphosa will be mindful of the consequences of delaying the budget. Ramaphosa also does not want another downgrade, especially after trying to convince investors at the World Economic Forum that the country is open for business. SN CGTN JHB SA.