SANGOCO Comments on the Budget Speech

Thursday, 27 February, 2014 - 11:57

The South African National NGO Coalition commends Finance Minister, Pravin Gordhan, on the good work under very hash country and global economic conditions

We start by commending the Minister on the good work under very hash country and global economic conditions. The depressing economic outlook of slow growth caused by recession that followed 2007/2008 economic meltdown in which a million jobs were lost has been successfully navigated against. There is renewed hope in South African economy.

We must recognize and acknowledge the Minister on sustaining growth on social spending which for us is an important pillar in the fight against poverty and hunger especially old age pension and social grants. The introduction of NHI is critical for our insurmountable war against mortality rates for t under fives and women. Spending R43bn from R41BNon HIV program is indicative of the seriousness with which the government is up-scaling the fight against the pandemic.  We acknowledge the incremental allotment to education as a priority, however, we are of the feeling that a research should be done around issues of scarce skills on the labour market so as address the real gap in terms skills development.

It is important not to miss interventions on the human settlement front which addresses homelessness. The R34.8bn allocation translating into216 000 houses which is a shortfall on the 300 000 odd that we need to address the backlog in delivery. We all the same commend the Minister on sustaining the momentum on this imperative delivery.

We however must voice our concern on transport infrastructure particularly rail passenger service run by the Passenger Rail Agency of South Africa (PRASSA). The delay in implementing the overhaul of the system is costing South Africa millions of rands in job opportunities. The system is not workable for an economy such as ours. Commuters in their millions arrive late to their work place almost daily. Trains do not keep to their schedule and management is very poor. Minister, rail is the backbone of our economy, but the unfortunate thing is that it only impacts negatively on the poor.  The poor are the ones who are constantly dismissed from their jobs for arriving late at work, making it impossible for the Commission for Conciliation, Mediation and Arbitration (CCMA) to defend them. The continued shift of project start-up dates shows lack of commitment if not leadership or lack of management expertise, which is an outcome of wrongful or inefficient deployment. PRASSA project is admittedly a complex undertaking and requires diligent planning and execution, but this should not justify postponement of such an important pillar of our economic strategy.

Development of business on the part of the Department of Trade and Industry (The Dti) has received an economic boost and job opportunities are expected to improve and thereby reduce unemployment. This will be realised through creation of Special Economic Zones which addresses the long time neglect of inland business development at the expense of Industrial Development Zones. We welcome this important corrective measure and further agree that National Development Plan was necessary in pointing out the inefficiencies in earlier development economic policy programmes.

The major challenge is the one mentioned by trade and industry, Rob Davies, in his address to the National Council of Provinces on 18 February 2014 said: “To date five IDZs have been designated (i.e Coega; East London, Richards Bay,  OR Tambo and Saldanha Bay), with the newly designated Saldanha Bay in October 2013. Honourable speaker, I can confidently indicate to this house that there are already eight investors in the Oil and Gas sector that are signing to invest at Saldanha Bay IDZ. Three of the five IDZs in Coega, East London and Richards Bay are fully operational.  Whilst these have achieved some major successes, 42 operational investments worth R4 billion and created over 5 000 direct jobs and 43,000 construction jobs), some weaknesses on the implementation were identified during IDZ policy review, which include:

  • weak governance;
  • lack of IDZ incentives;
  • poor stakeholder co-ordination; and
  • lack of integrated planning.”

The statement auger what we have been saying all along and that is implantation is a challenge facing the South African government. The problem lies somewhere in between deployment and skills in managing complex economic programmes. One might also add the lack of leadership in different governmental department geared to tackle such complexity.

The R6.5 billion support to small business over a three year period is a good public response to unemployment. Tax breaks allocated to Business is also an added good, however, policy implementation should ensure the expected outcome of decent job, youth employment, increased Broad-Based Black Economic Empowerment opportunities and improved income distribution to reduce inequality.

In conclusion, we believe that the Budget is balanced. There is something there for everyone. Former president Nelson Mandela once said: “The brave man is not he who does not feel afraid, but he who conquers that fear.”

Minister we have confidence in you.


Jacob Molapisi
Executive Director
South African National NGO Coalition

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