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Students march on Parliament ahead of Gordhan's MTBS

Oct 26, 2016
Students march on Parliament ahead of Gordhan's MTBS

There is a heavy police presence at the National Assembly in Cape Town where Finance Minister Pravin Gordhan is expected to table the Medium Term Budget Policy Statement (MTBPS) on Wednesday afternoon. This is as hundreds of students from the University of Cape Town, Cape Peninsula University of Technology, University of Western Cape and Stellenbosch University descended on Parliament as part of the recent nationwide #FeesMustFall protests.

Early on Minister Gordhan came out of the Parliamentray precinct to meet with the students.

Also known as the mini budget, the MTBPS is set to kick-off at 2pm. This is his maiden mini budget since his return to the finance portfolio last December.

At its second last meeting of the year in September, the Reserve Bank’s Monetary Policy Committee (MPC) said that while the bank has revised the country’s growth forecast up from 0% to 0.4% for 2016 following stronger-than-expected economic data for the second quarter, the domestic economy remains weak.

The eyes of the nation will be on Minster Gordhan, as he is expected to announce how National Treasury will fund the university fees shortfall.

Higher Education and Training Minster Blade Nzimande last month announced that fees for students, who qualify for funding under the National Student Financial Aid Scheme, and the “missing middle”, would not increase in 2017.

Minister Nzimande announced that universities will individually decide on fee increases for the 2017 academic year. However, the recommendation is that fee increases should not go above 8%.

In a statement last month, National Treasury said it has been exploring different mechanisms of finding the money to pay for the subsidy.

The MTBPS comes ahead of Standard and Poor’s credit rating review in December.

Rating agencies Fitch and Standard & Poor’s both have South Africa’s credit outlook at BBB- with a negative outlook, one notch above junk status.

In May, Moody’s held South Africa’s credit rating at Baa2 – two notches above junk, while keeping the outlook negative.

Minister Gordhan is expected to announce National Treasury’s views on growth prospects.

On Thursday, the Minister will brief the Standing Committees on Appropriations and Finance and Select Committees on Appropriations and Finance on the 2016 MTBPS in Parliament.

–additional reporting SAnews.gov.za

Image: @laamisan