>> South Africa's new leadership has taken a tax gamble. On Wednesday finance minister Malusi Gigaba announced that, for the first time in 25 years, the country will raise its value-added tax. Hiking it from 14 to 15% as part of efforts to cut the deficit and stabilize debt under new president, Cyril Ramaphosa.
>> The poor will remain protected through zero rated basic food stamps and above inflation increases in social income.>> But the opposition leader has called the move an assault against the poor. And if could backfire on Ramaphosa, who faces a national election next year. The treasury says South Africa faces a 48.2 billion rand, or $4 billion revenue gap, in the current fiscal year.
And South African debt faces the risk of a downgrade to junk credit rating by Moody's. Much of the blame for the state of the economy has been laid at the door of former president Jacob Zuma and his allies. He was forced to resign as president this month by the ruling African National Congress following a series of scandals, and denies all wrongdoing.
Wednesday's move is expected to generate an additional 23 billion rand, or $2 billion worth of revenue, in 2018, 19. But it still could be Gigaba's first and last budget speech, as Ramaphosa picks his cabinet. It's clear whoever he chooses faces an uphill battle to revitalize growth and create jobs in a nation still polarized by race and inequality,