This week the finance minister Tito Mboweni tweeted the metaphor of closing a hippo’s mouth to hint how hard a job he faces closing the fiscal gap. It may be easier for Mboweni to catch a real life hippo and wrestle with it rather than to solve South Africa’s gaping debt problem – expected to rise to 80% of GDP by early next year.

On the afternoon of June 24 Mboweni will outline his emergency budget in the hope it will help South Africa ride out he COVID-19 storm and find elusive growth. South Africa’s once mighty economy is expected to contract by more than 10% this year and shed more than a million jobs. Figures out this week show unemployment in South Africa has already reached 30.1 % and youth employment has risen to 59%. Mboweni has warned that South Africa could face a sovereign debt crisis by 2024 forcing it to go cap-in-hand to the International Monetary Fund for a bailout.

Mboweni is expected to reveal a budget deficit for this year projected at close to 15% of GDP, a severe injury to government finances as the economy contracts alongside a huge collapse in tax revenue of up to R300bn.In all of this Mboweni has to decide whether to throw more scarce taxpayers money at the losing making state owned enterprises – his cabinet colleagues say he should, the finance minister feels he shouldn’t.

“SA’s debt is further estimated to rise to 90.9% by 2023 and over 100% by 2025, climbing to a massive 113.85 by 2029. SA is likely headed for further substantial credit rating downgrades from Moody’s, Fitch and S&P, and likely quite rapidly, from out of the BB category into the single B category, which is just above C grade,” says Annabel Bishop, Chief Economist Investec

“There is not much wriggle room that the fiscus has left coming into 2020 and now we face this miracle budget with a shortfall in revenue,” says Nesan Nair a senior portfolio manager at Sasfin.

“But as far as investors are concerned there is not better person than Tito Mboweni to do the job.”

Nolan Wapenaar, of Anchor Capital, said he was expecting a deficit of about 14, which was a significant gap to be financed.

“The country is selling bonds to the tune of a billion Rand a day. We need to get into financial shape and get out of the dire financial shape we are in,” he says.

Bernard Sacks, a senior tax partner at Mazars, believes that cutting corporate tax could help get the economy back into shape.

“In world terms we are not competitive at 28 %; we need to be at 20 % to attract foreign investment. That level of tax would see money come in and South Africans trained and put to work…I don’t think we will see the minister raise tax rates which is just as well because most companies are punch drunk right now,” says Sacks.