Finance Minister Enoch Godongwana is arming himself with a spate of key laws to achieve his stated objectives to rein in spending of SOEs, municipalities and local government through an Omnibus Bill, says the writer.
South Africans brace yourself for the next three years! Finance Minister Enoch Godongwana in his Medium-Term Budget Policy Statement (MTBPS) last Wednesday, like his president a few days earlier, invoked the spirit of Amabhokobhoko with its resilience and resolve which the Springboks so doggedly meted out to the All Blacks in Paris to win the Rugby World Cup for a historic fourth time.
Team Ramaphosa wants to emulate the success of the champion Boks against much greater great odds in reversing and thus transforming the socio-economic fortunes, some would say entrenched woes, of the country.
Messrs Ramaphosa and Godongwana have also repeatedly invoked the spirit of ubuntu as the guiding principle of their policy approach.
The metaphors abound like confetti –that of a team and government in union.
“At moments when their cause seemed lost,” declared Ramaphosa in his address to the nation on his government’s economic progress, “they fought back and they emerged victorious.
“The determination and resilience of our teams have given credence to Madiba’s words that sport unites the nation. As we confront the many severe challenges in our country, we draw hope and encouragement from the determination and the performance of the Springboks.”
Siya Kolisi and his rugby cadres seem to have the values of ubuntu imprinted in their DNA – that of uniting the country, playing for the nation, and succeeding in adversity.
The ANC since the elapse of Madiba’s presidency, has been on a downward spiral, with many of its erstwhile supporters including the late great Bishop Desmond Tutu decrying the moral collapse of the party.
Activists stress the concept of ubuntu has long been hijacked and commercialised, bereft of its meaning of dignity, common humanity, responsibility of individuals to each other – the very antidote to unfettered individualism, self-interest and enrichment.
Any moral claim by the ANC to the values of ubuntu rings hollow.
The ruling party’s rhetoric does not match its failure in policy delivery in righting the wrongs of apartheid, after its first three terms in office.
South Africans of all political colours will rightly hold him, his president and the ANC to account.
His three core policy objectives are to “stabilise public finances while maintaining support for the most vulnerable and protecting front line services; fast track growth-enhancing reforms; and reconfiguring the structure and size of the state, while strengthening its capacity to deliver quality public services.”
How many times has a South African finance minister started a speech in the last decade lamenting that “the economic outlook over the medium term remains weak, reflecting the cumulative effect of power cuts, the poor performance of the logistics sector, high inflation, rising borrowing costs, and a weaker global environment?”
The data of despair is depressing.
The country’s gross debt for the next three financial years is projected by Godongwana to rise to monopoly figures at R16 trillion – from R4.8 trillion in 2023/24 to R5.2 trillion in 2024-25 and over R6bn in 2025/26.
Not surprisingly, he “now expects gross government debt to stabilise at 77% of GDP by 2025/26, which is higher than the February forecast.”
The nauseous bedfellow of rising debt is debt servicing costs.
“Over the next three years, debt-service costs as a share of revenue will increase from 20.7% per cent in 2023/24 to 22.1% in 2026/27,” rued Godongwana. This translates into debt interest servicing costs of R385.9bn in 2024 alone and cumulatively over the Medium-Term Economic Forecast of a staggering estimated R1.3 trillion, which is unsustainable by any metric save rising revenues.
Godongwana is arming himself with a spate of key laws to achieve his stated objectives to rein in spending of SOEs, municipalities and local government through an Omnibus Bill.
Here he has to be commended for taking on the public spending orthodoxy of the ANC, which seems to be concentrated on social spending beyond the normal vulnerable and disabled cohorts for as many economic segments irrespective of whether the economy can afford it or not.
Parker is an economist and writer based in London
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