(Bloomberg) -- South Africa’s government delayed Finance Minister Enoch Godongwana’s maiden budget for a second time, without immediately explaining the reason for the postponement.
Godongwana will deliver the medium-term budget policy statement Nov. 11, a week later than previously scheduled, parliament spokesman Moloto Mothapo said on Twitter. The closely watched speech usually takes place in late October and had been scheduled to Nov. 4 to accommodate municipal elections set to take place Nov. 1.
The Treasury didn’t immediately respond to requests for comment sent by email and text message. Investors are looking to Godongwana’s budget for direction and clear strategies on reducing debt and lowering the deficit.
“Markets are depressingly used to these delays, but they erode confidence and price discovery given the length of time there is in each MTBPS cycle in government to get things right,” said Peter Attard Montalto, head of capital markets research at Intellidex. “Treasury needs to transparently lay out the real reasons for the delay, which in this case are of importance to the market.”
The rand traded 0.2% weaker at 14.7431 per dollar by 11:39 a.m. in Johannesburg.
A business sentiment index compiled by the South African Chamber of Commerce and Industry dropped to a one-year low in September as economic activity continued to be hamstrung by restrictions to curb the coronavirus pandemic and unease persisted following deadly riots in July.
The budget is being formulated within a tight framework, though a windfall in revenue from mining companies benefiting from high commodity prices and changes to the way in which gross domestic product is calculated is likely to led to an improvement in key fiscal metrics.
The new forecasts will likely show a balanced primary budget in the 2023 fiscal year, compared with the government’s February estimate of a deficit of 1.9% of gross domestic product, according to BNP Paribas.
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