Chief Economist of Nedbank Group Limited Dennis Dykes says the Finance Minister’s Mid-term Budget will be closely watched to see how most universities will cover the 0% fees increases for families earning below R600 000.

Speaking on Morning Live he says, “On a broad level he would need to cover how potentially this would be covered whether its through increased tax or cutting expenditure somewhere else.”

Students across the country have been protesting demanding free education.

Some universities continue to face disruptions as student protests are in the seventh week.

Violent demonstrations, arson and forced absenteeism have severely compromised the academic programme.

Dykes also touched on ratings agencies and the effects if South Africa were put into junk status.

He says, “It would mean that as a country we would pay more for all debt, interest rates would go up which rolls through the economy meaning less employment and GDP would be lower.”

He says it would then take about five years to convince the ratings agencies that the corrective action has been taken.

“Hence, it would be better to take remedial action before to avoid the downgrade,” adds Dykes.