JOHANNESBURG, Feb. 18 (Xinhua) -- With the date for South African budget speech looming, experts said the finance minister can tell the nation where he will find cash injection for the struggling economy.
"The biggest component of funding is the Eskom package," economist Lumkile Mondi told Xinhua on Monday. "We know that the debt is unsustainable and I think there will be a swap where the state will take over the debt in return of equity."
Eskom's current debit is R450 billion (31.8 billion U.S. dollars) and it needs over R100 billion (7 billion dollars) to survive. Rating agencies have warned that Eskom's collapse would have an impact on the economy.
Other state-owned entities including South African Airways (SAA) and the South African Broadcasting Cooperation (SABC) are also facing financial woes.
Mondi further said that finding more money to fund free tertiary education announced by former President Jacob Zuma is a challenge.
"He (Zuma) should say where money for free education will come from. At this rate, we cannot sustain the medium term expenditure frame work presented in October last year," Mondi said.
Given low economic growth and the need to lure investors, economists are not expecting the minister to increase company taxes and Value added Tax.
Head of Wits University School of Economics and Business Science Jannie Rossouw told Xinhua that Finance Minister Tito Mboweni has to reduce the state's expenditure.
"The increasing interest on government debt should be tackled. It needs to get into grips with the remuneration of civil servants that is getting out of hand," he said, adding that government "cannot longer afford" to borrow more money.
