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South Africa to hold final consideration of 2020 Adjustments Appropriation Bill


South Africa to hold final consideration of 2020 Adjustments Appropriation Bill

SouthAfrica Reuters
Photo: Reuters

South Africa’s National Assembly will today hold a plenary sitting to discuss the 2020 Adjustments Appropriation Bill, following the parliamentary establishment of a revised fiscal allocation framework earlier this month.

In the midst of a global pandemic, the bill will effectively determine the state’s emergency budget. Finance Minister Tito Mboweni tabled the budget in late June to shift $8.8 billion to COVID-19 relief measures, placing the validity of Section 6(1)—which allows the finance minister to approve “unforeseen and unavoidable expenditure”—in legal limbo.

In its current state, the legislation requires an amendment to free up Section 6(1) and legalise access to additional emergency funding. Expect the bill’s approval to boost South Africa’s medium-term economic outlook as leadership struggles to contain the pandemic’s swelling economic fallout. A positive outcome from today’s sitting could liberate a contingency reserve of $304 million in the run-up to a second Adjustments Appropriation Bill, which is slated for introduction in October. A rejection could restrict short-term funding to no more than 2% of the national revenue fund—available via Section 16 of the Public Finance Management Act—and severely constrain the national recovery timeline.

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