Fiscal prudence is simply a must

This is no time for SA to abandon fiscal discipline, which is why Godongwana's third Budget hit the right note

- Natale Labia

To paraphrase Ronald Reagan, “this time is different” are the four most dangerous words in economics. And yet, in a recent op-ed for Business Day, Ziyanda Stuurman invokes precisely this logic. She argues that although “budget cuts have become conventional wisdom in SA in the past decade ... we are no longer living in conventional times”.

Surely, however, it is exactly during turbulent and unpredictable economic conditions such as those we are living through that fiscal discipline becomes more critical, not less?

Stuurman makes an impassioned plea to the National Treasury to break from economic orthodoxy and embrace the principles of modern monetary theory - essentially, spend freely in the hope that growth and welfare dividends will follow. But her claim that countries in Africa like Kenya are successfully applying this approach is just wrong.

Governments all over the continent are tightening their belts in response to severe economic pressure. In the past week alone, Mozambique, Botswana and Kenya have announced plans to reduce spending. Ghana did so in March.