African Monitor Comments on the 2011/12 Budget

NGO Budget 2011
Thursday, 24 February, 2011 - 11:37

The 2011 budget sets out to ensure, among other things, that government can intensify activities that make a difference to the lives and prospects of all South Africans. He used the word ‘dignity’ at least four times in his speech. To a large degree Mr Pravin Gordhan, the Minister of Finance, has gone a long way to give something to everyone. In particular the various initiatives that provide for a boost to employment opportunities for the youth deserve to be applauded 

The 2011 budget sets out to ensure, among other things, that government can intensify activities that make a difference to the lives and prospects of all South Africans. He used the word ‘dignity’ at least four times in his speech. To a large degree Mr Pravin Gordhan, the Minister of Finance, has gone a long way to give something to everyone. In particular the various initiatives that provide for a boost to employment opportunities for the youth deserve to be applauded.

In setting the context for his speech, the minister correctly points out that “we live in an extra-ordinary time in history - a time of immense transition, of profound risks, but also of great opportunity”. “...now is the time to do extraordinary things... it requires new ideas and bold efforts from all: government, business, labour, communities and every family”.

Our comment is that, in terms of this context, the minister misses a very important point: to link Cape Town to Cairo. We don’t live in extraordinary times only in terms of “epoch-changing shifts in the global economy” as the Minister points out. We very much also live in extraordinary times when the ‘new’ generation of the technologically connected uses the power of ‘new media’ to do extraordinary things. The minister needed to join the dots to concede that the drivers of the new ideas and bold efforts are not governments alone anymore.

It is the new generation of people armed with a simple cellphone that overthrow, not just regimes that have outlived their sell-by date, but old ideas that are no longer fit for purpose. Cairo in many respects represents the next level of service delivery protests that have rocked this country for some time now with protesters seeking dignity, but which were not given mention in the budget speech, despite the many references to dignity. Cairo demands that the rhetoric of collaborative effort between government, business, labour, communities and the family be translated into reality, yesterday.

In this regard, dots needed to be joined between [dot 1] the “42 percent of our young people between ages of 18 and 29 who are unemployed”, but who, in the minister’s own words, “possess the awareness and ability to learn... who look to us to give them meaning to their hope...” and [dot 2] the “businesses which employ fewer than 50 workers accounting for 68 percent of private sector employment...” and [dot 3] the three “inspiring examples” - Mlondolozi Kosi who set up a small ICT training centre, Norman Mpedi an ex-MK combatant who is making Nguni Juice, and Antonio Pooe who started Exactech Fraud Solutions - the minister cited from among “the thousands of small and micro businesses which have taken root and filled a vital place in our economy”.

When all these and other dots are joined, they tell the story of the nature of this country’s economy, the mainstay of the majority of the productive age-groups and how employment is created for these people today and going forward. In the South African economy, the real drivers and the clues to economic growth need to be informed not by a hypothetical economy that serves a few and relegates others to social grants or an undignified life, but by the realities, aspirations, assets and capacities of the majority of our people. How to make this growth bring about significant and sustained change in the pace and tempo of the resultant progress is the challenge before us all.

A very impotent pointer mentioned by the minister as to how the resources to unlock the potential could be found, was that he had identified savings of R30.6 billion from existing budget allocations to ministries, thanks to the cooperation of cabinet colleagues and departmental accounting officers. To us, this is significant in that were the government to involve the other players it acknowledges and those it forgets to acknowledge – business, labour, philanthropists, civil societies, communities, the unemployed youth, small and micro entrepreneurs, and the families - lots more money would be found - within existing resource envelopes through efficiency savings and re-prioritisation - and outside the budget from the other players.

In fact, money would cease being a leading constraint to supporting more people - particularly the youth - to become productive, get a stake in a stable and growing economy, pay taxes and accelerate the momentum. They would then cease to look to government for “giving meaning to their hope”. For future budgets, government will do well to begin to take risks and open up to new ideas for alternative investment industries from beyond itself. Among other things, Cairo teaches us that government no longer has the monopoly of ideas. Cape Town must learn a thing or two from Cairo.

Warren Nyamugasira
Managing Director
African Monitor
www.africanmonitor.org 

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