AN OPINION EXPECTATIONS AHEAD OF THE 2018 BUDGET SPEECH
The change in the South African political land scape has built up a fresh hope in the minds of most South Africans. It is even most satisfying to note that the transition went on very smoothly without any iota of complications. This development created a sense of certainty and stability both in the body polity as well as the economy.
However, the previous president had stirred the waters in the education sector with the free education policy introduction. This is coupled with the economic issues that has for a long time generated threats of downgrading. Consequently, the new president has the task of enhancing stability in economic and education sectors. Therefore the 2018 budget should accommodate provision and policy thrust that could address these matters and to further enhance confidence of investors in the economy.
General perception of the change of guard in the presidency
The feeling of most South Africans and everybody living here is that the coming in of Cyril Ramaphosa as president of the Republic brings a soothing relief in the country. This is demonstrated by the orderly behavior of all the opposition parties during the SONA 2018 session. This is unlike what had always been witnessed in previous periods where there had been much chaos during such occasions. However, the atmosphere suggests that people are waiting to see the direction that the president is going to move country to. That is to say that people have adopted an attitude referred in West Africa as “Sidon look”, that is ‘wait and see” attitude. It therefore appears that if the president fails to address a number of burning issues of the economy and the youth in particular, that chaos may start to erupt again in parliament and probably in the streets as well.
As a result of the above perceptions it is my opinion that the budget speech for 2018 should address the following issues:
- Threat of downgrading
It is being argued in some quarters that the threat of downgrading has not gone away. The probable reason for this assumption could be because there has not been any detailed program and policy put forward by the government to address the persistent drop in GDP growth rate in recent years. More so, the state of the public enterprises such as ESKOM, South African Airways and SABC, among other public enterprises have not improved in recent years. This has been leading to the pouring in of public funds in order to revitalize them. The 2018 budget should address the issue of SOEs on how they could become self-sustaining rather than the current state of becoming a conduit pipe for sapping of public funds. The sapping of public funds by the SOEs might lead to increase in domestic debt burden, which is an invitation to economic downgrading. It is common knowledge that the major causes of the failure of SOEs are government meddling or interference in their affairs through nepotism and favoritism in appointing key officers in these businesses. Therefore, the budget speech should address the process of appointing officers so that they could be run to become independent of government.
- Free education policy
The budget should clarify the free education policy and funding. As at present, many institutions of higher learning do not yet understand in full how to handle the agitations of students to be admitted on the basis of no fees. The confusion has led to many universities without funds to run their programs for the year as before. This is because the money they should have collected from students are no longer forthcoming. The budget should ensure that there is sufficient funds to finance the free education policy so that universities would not be cash-strapped. If there is no sufficient funding for university programs due to the free education policy, the standard and quality of education might be affected as universities may not be able to obtain the necessary learning inputs due to paucity of funds. Free education could be made a reality if government takes the initiative to block avenues for the wastage of public funds. This includes avoiding budget padding so that money could be released for other important projects such as education. Also if government reduces its expenditure headings by downsizing government portfolios, then money could come from such angles to finance the free education.
- Job creation
It is noted that the unemployment rate has risen in recent time. This situation creates youth restiveness and also increase in violent crimes. The budget should address the issue of job creation in real terms through the following programs:
- Encouraging the establishment of Small and medium scale enterprises (SMEs). In other parts of Africa, the engine of growth has been the SMEs. This sub-sector employs even more than the public sector. In South Africa focus is mainly on the public sector for jobs. However, if the SMEs are developed, this would absorb a large chunk of the jobless. Therefore, the budget should provide policies and incentives that could develop the SMEs for job creation purposes and to grow the economy in general.
- The industrial sector should be stabilized with policies that could encourage expansion and higher productivity. If there is no expansion, the sector would not be able to absorb more labour. Therefore, the budget should address the issue through tax incentive schemes and a total reduction in the cost of doing business in the country.
It is my opinion that the seeming political stability, if followed with clear economic policies on how to revitalize the SOEs, create the SMEs, motivate the industrial sector, that downgrading would be averted. Also by cutting government spending, free education could become a reality through funding. These are issues I would like the 2018 budget speech to address.
