The policy statement is intended to act as guide to the February budget, both to government departments and the market. Its drastic revision indicates a profound loss of influence of the Treasury and will dramatically affect the pending decisions by credit ratings agencies. It also indicates that the prospects of fiscal consolidation and of returning to the pre-October debt stabilisation programme are minimal.
The move has already led to the resignation of the head of the budget office, Michael Sachs, last week, with more Treasury officials expected to follow.
However, Treasury director-general Dondo Mogajane is adamant that the change to the budget process does not amount to a coup by the Department of Monitoring and Evaluation, headed by Jeff Radebe, but is rather a constructive initiative. The department is located in the Presidency.
"I'm not going to let anyone take control of the budget process. We have to bring Treasury and the [Department of Monitoring and Evaluation] closer. It was not done this way before, but it is necessary now."
Source: Business Day
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