The African National Congress (ANC) has established a committee to look into ways of containing costs in government without adversely affecting important projects.
This was announced by party spokesperson Mahlengi Bhengu-Motsiri who briefed the media on Thursday on various matters facing the country including load-shedding, social grants, NSFAS and the repo rate.
Bhengu-Motsiri’s announcement comes after a letter penned by Treasury last month to national and provincial departments outlining cost-cutting measures to close government’s fiscal gap.
The directives come weeks before Finance Minister, Enoch Godongwana presents his Medium Term Budget Policy Statement.
Bhengu-Motsiri says, “A committee has been established lead by Comrade Mmamoloko Kubayi in her capacity as Chair of the Economic Transformation Committee of the NEC and members of the alliance to closely examine how the four priorities outlined in the January 8 Statement can continue to find tangible expression in the work of the ANC government. It should be noted that the capital projects have not been stopped.”
The governing party has also welcomed the decision of the Reserve Bank to leave the repo rate unchanged.
The party says it has also noted that food inflation has substantially dropped from 10% in July to 8.2% in August. It says this is a strong indicator that efforts to ensure a reduction in the rising costs of living are beginning to bear tangible outcomes.
“Global Benchmarking is critical when assessing inflation and related metrics; it is essential to note that in many regions worldwide, inflation is in double digits, especially with food inflation being in the high teen percentage rates. South Africa’s ability to contain this is exemplary, and we remain positive on improved financial data. We are also aware that external environmental risk factors, such as the price of Crude Oil, present a real inflation risk, and we are closely tracking the assessed impact in our internal modelling estimates,” explains Bhengu-Motsiri.