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South Africa’s economy is no longer in free fall.  The national debt is expected to stabilise at 77.9% after nearly 20 years of accumulation, with the reduction in the inflation target being good news for investors and struggling households. However, it will constrain borrowing. The additional R15.8 Billion committed to infrastructure is beneficial for development and job creation.

The 1.2% economic growth rate, forecast to rise to 1.8% in three years, is, however, much too slow to meaningfully address poverty and inequality in the short to medium term. And another SOE bailout, this time for Denel, inspires little confidence that systemic inefficiencies will ever be addressed.

More money won’t fall from the sky; the Treasury must work more effectively with the resources at its disposal to meet its dual obligations to develop an environment for business growth while providing for the basic needs of those unable to provide for themselves. 

In May, when Minister of Finance Enoch Godongwana delivered a delayed budget, among his most promising commitments was to thoroughly review government spending to free up resources by cutting unnecessary and meaningless expenses. There was little sign of this review in the Minister’s speech today.

While Godongwana sought to paint a picture of a prudent economy conducive to business investment, he had little to say of much comfort to millions of impoverished and economically excluded citizens. The chasm between rich and poor is the country’s greatest existential threat. The absence of an announcement of a Basic Income Grant or a national food programme was a great disappointment.

Issued by Brett Herron, Unite for Change Leadership Council member and GOOD member of the Western Cape Provincial Parliament