By Professor Bheki Mngomezulu
The Medium-Term Budget Policy Statement (MTBPS) which was delivered by Minister Enoch Godongwana on October 30, 2024, was awaited with keen interest by many South Africans for different reasons.
This should not come as a surprise. It is the first time since 1994 that the Minister had to deliver an MTBPS on behalf of a multiparty government. From the first administration in 1994 to the sixth administration whose term of office ended in May 2024, the MTBPS was crafted solely by the ANC.
This time, the other nine members of the multiparty coalition government, often misleadingly referred to as the Government of National Unity (GNU), had an input in this document. This was done so that the MTBPS would represent the voices of the collective.
While this is indeed a new development, many South Africans remain unphased that there is a new political development in the country. All they think about are bread and butter issues. They worry about economic growth, unemployment, poverty, social inequality, crime, the high cost of living, and many other basic issues.
Against this backdrop, the key question becomes: what makes this MTBPS different? Does the fact that it was produced by a multiparty government make any difference? Even more importantly, to what extent does it address the issues enumerated above?
The best way to answer these questions is by doing a close analysis of Godongwana’s speech on the MTBPS.
Unlike previous Budget Policy Statements, this one was predicated on presenting the so-called GNU as a success story. This was evidenced in the fact that Godongwana began by reminding the nation about the three priorities of the multiparty coalition government as outlined by President Ramaphosa.
These priorities were to drive inclusive growth and job creation, reduce poverty, tackle the high cost of living, and build a capable, ethical, and developmental state.
While these commitments sound promising and encouraging, the content of the MTBPS does not seem to have consolidated the hope that the multiparty government will deliver on its promise.
By the Minister’s admission, South Africa’s GDP for 2024 is projected to grow by 1.1% as opposed to the 1.3% that was projected in February 2024 during the Minister’s Budget Speech. Over the medium term, economic growth is forecast to average only 1.8%. This is against the global economic growth which is estimated to grow by 3.2% in 2024/2025. Now, if the economy is growing at such a slow pace, how can this multiparty government live up to its promises as outlined above?
In his optimistic outlook, Godongwana told the nation that the government has a strategy through which it will boost economic growth. He claimed that such a strategy is anchored on four pillars.
These pillars are maintaining macroeconomic policy, implementing structural returns, supporting growth-enhancing infrastructure, and building state capacity. While these pillars look good on paper, implementation remains a challenge.
One of the political dynamics linked to this MTBPS is that there are divergent views among the coalition partners on how the country should progress to achieve all the goals set out by the Minister.
For example, the two main partners (ANC and DA) hold diametrically opposed viewpoints on how the country should work towards economic recovery. Pushed by Alliance partners in the Tripartite Alliance, the ANC wants to revive state-owned entities such as Eskom and Transnet.
The DA on the other hand is more amenable to the idea of privatisation – arguing that this will ensure economic growth, job creation, and better service delivery in general. Already, these differences of opinion cast a cloud on the successful implementation of any proposed economic policies.
The promise by the Minister that infrastructure development will be prioritised is a welcome gesture. Even his commitment that the implementation of structural reforms will be accelerated brings hope.
However, the recent public spat between the DA and the ANC on both domestic and foreign policies paints a gloomy picture and leads to pessimism.
On domestic issues, sectors such as education and health are among the most important ones for the people of this country. Already, there has been a war of words between the ANC and the DA on the BELA Act and NHI.
While these sectors are critical, announcements have already been made that there will be no new appointments of teachers for the next three years. Doctors, nurses, and other medical staff have been protesting across the country demanding to be employed. There is nothing in this MTBPS which gives hope that their concerns will be addressed.
What was also glaring in the Minister’s speech was his announcement that the government will encourage public sector workers to take early retirement as a cost-saving mechanism.
There is no logic here. Firstly, such retirements will not necessarily release more money because the youth will be employed to replace those who will retire. Secondly, MPs still have no retirement age. Instead, there is a bloated Cabinet – with some Ministries even having two Deputy Ministers.
The successes of Operation Vulindlela highlighted by the Minister are appreciated. But for as long as the government fails to have a clear plan on how to address issues such as crime and extortion even these successes will be reversed.
Corruption has deprived South African citizens of basic services. The implementation of the recommendations of the Zondo Commission is moving at a snail’s pace. Unless this scourge is addressed, many of the promises made in the MTBPS will not come to fruition.
Lastly, the Minister talked about the need to strengthen local government. Communities are struggling with water and housing shortages. Meanwhile, the blame game between the national and local spheres of government continues unabated.
In a nutshell, while the 2024 MTBPS makes good promises, it is not a panacea for addressing the country’s endemic challenges. The coalition government may have recorded some successes, but it is not the answer to the country’s problems. In-fighting on domestic and foreign policy positions will worsen the situation.
By Professor Bheki Mngomezulu is the Director of the Centre for the Advancement of Non-Racialism and Democracy at the Nelson Mandela University.
IOL