Domestic markets rallied just after Finance Minister Tito Mboweni began speaking, with the rand strengthening to around 14.40/dlr from 14.55, while bond yields dropped a few basis points. This speaks to the fact that it was not as bad as many expected – there was also a pledged cut in domestic debt issuance. That doesn’t mean that economists are popping bottles of bubbly, which are about to climb in price with an 8% hike in sin taxes.
“It seemed like quite a jolly time in parliament during Mbowen’s speech. Granted, it was a much more positive speech than I think a lot of analysts expected – there was not a huge increase in VAT or income tax, and corporate income tax was actually lowered,” Shawn Duthie, managing director of the Africa-focused consulting firm Inyani Intelligence, told