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S/African economy must adapt to new situation or sink – Minister

South Africa's “economy is in recession and its revenue base is weak,” Finance Minister Tito Mboweni has told parliament.Due to…

South Africa’s “economy is in recession and its revenue base is weak,” Finance Minister Tito Mboweni has told parliament.Due to this situation, “it is time for the country to adapt to the new economic situation,” Mboweni told members of parliament during a budget debate in Cape Town on Friday.

According to the minister, South Africa could expect a big change in the budgeting process going forward.

“We are no longer as rich as we used to think we are. We have to adapt to the new situation.

“This new situation, in my view, requires that we think seriously about going to zero-based budgeting. In other words, we should re-focus our attention on strategic issues and on growth-enhancing activities,” he said.

In this regard, Mboweni requested government ministries and agencies to get used to zero-based budgeting, where “all expenses are justified for each new period.”

With this zero-based budgeting, budgets for ministries and agencies are built around what is needed for the coming period, regardless of whether each budget is higher or lower than the previous one, Mboweni said.

The minister added that the balancing act for the national budget would, from now and onward, “be trickier than ever”.

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