By Rachel Mohamed
Finance Minister Enoch Godongwana addressed Parliament today, appealing to the National Assembly for support on the fiscal framework and revenue proposals linked to the 2025 budget he presented last month. His budget recommendations have previously faced hurdles, with a prior budget vote annulled by the courts.
Speaking on VOC, political economist Patrick Bond emphasized the need for society to interrogate whether interest rates will remain excessively high due to shifts in inflation-targeting policy—an area overseen by the South African Reserve Bank (SARB). He noted that this reflects broader economic power dynamics between winners and losers.
“The interest rate is among the highest in the world,” said Bond. “We rank fourth among countries issuing ten-year bonds—alongside Pakistan and Russia—because we pay extremely high interest rates to foreign investors.”
Bond added, “If tighter exchange controls were introduced, and we eased away from rigidly targeting inflation within the 3–6% range—perhaps adjusting it to 3–4%—we could potentially lower interest rates. The current high rates are designed to curb consumer spending, which is why they remain elevated.”
Listen for the full interview:
VOC News
Photo: Pixabay
