South Africa's new President Cyril Ramaphosa has begun his tenure on the right foot with the mining sector, a chief executive has told CNBC.
The government of Africa's most industrialised country has to plug a revenue hole in its budget and fix its economy after nine years of mismanagement under the scandal-plagued Jacob Zuma. He was forced to step down as president this month by the ruling African National Congress (ANC), following a series of scandals.
Gigaba said poor households would be cushioned against the Value-Added Tax rate rise through a zero-rating of basic food items such as maize meal and beans, and welfare payments increases.
He said the issue of corruption is on "our radar screen". "If you live on an extremely tight budget and have to count every rand you have, it will affect what you can buy".
In a sign that it was mostly middle to high income earners who were targeted by the tax increases, the Treasury said the excise duty on luxury goods would be raised to 9 percent from 7 percent, among other taxes. Analysts forecast this year´s growth will jump to 1.8 percent.
In return, the government will cover tuition and living expenses for students from poor and middle-class families attending universities or training colleges, a policy Mr. Gigaba said would cost some 57 billion rand ($4.86 billion) over the next three years.
That is barely in line with population growth and far short of the 3% expansion for 2018 Mr. Ramaphosa had envisaged when he campaigned to become ANC leader previous year, and of the 5% growth he had foreseen for the period after 2023. Last week the party elected him head of state as Zuma resigned under political pressure.
Gigaba, who is widely seen as a Zuma loyalist, jokingly asked Ramaphosa "how much time do I have, sir?" as he started to deliver his speech.
Minister Gigaba "has this tainted history and the problem with him delivering the budget is that people know that he has been involved so intimately with the state capture project" and "cannot signal to global markets a credible turnaround", said Georg.
Since Ramaphosa was sworn in as president, the rand has strengthened, the bond market is at its best level in almost two years and local equities rose nearly four percent on Friday when Ramaphosa delivered his maiden State of the Nation Address. "We will not allow smash and grab interventions", Ramaphosa said. "There is positive sentiment".
Mr Ramaphosa was the only candidate nominated for election after two opposition parties said they would not participate.