March 16, 2020 / 2:00 PM / 17 days ago

UPDATE 1-South Africa will have to "shift" spending to tackle coronavirus - finmin

(Adds detail, quotes, context)

PRETORIA, March 16 (Reuters) - Finance Minister Tito Mboweni said on Monday that South Africa would need to “shift” spending across government to free up funds to tackle the coronavirus outbreak.

Mboweni’s comments suggest the government is not planning a massive fiscal splurge over coronavirus, as it battles to contain the budget deficit and preserve its final investment-grade credit rating from Moody’s.

“As the situation develops we will need to set aside further funding, that means we will have to reduce programmes throughout the government system by reducing the allocated amounts so that we can shift this balance towards this project,” the minister said at a news conference, as the country’s number of confirmed coronavirus cases rose to 62.

Mboweni said the government had funds immediately available in the National Disaster Fund but would not disclose how much was in the fund or what was planned.

Last month’s budget provisionally set aside 500 million rand ($30 million) to fund disaster recovery projects in the fiscal year starting on April 1, with smaller amounts set aside for provincial and municipal disaster recovery plans.

The finance ministry has another 5 billion rand in the contingency reserve for the next fiscal year and could raise more funds via a special appropriation if it deems it necessary.

But Mboweni said the government’s focus for now was on ensuring the economy “doesn’t grind to a halt”.

“Somebody said something about a stimulus package. Well, before we get into that, let’s get the economy going as it is. ... Let’s make sure we don’t get into a prolonged recession,” he said.

Moody’s is scheduled to review South Africa’s ‘Baa3’ rating at the end of this month. The rating has a “negative” outlook.

$1 = 16.6235 rand Reporting by Alexander Winning, Editing by William Maclean

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