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29 June 2020 | Story Edward Kagiso Molefe and Dr Nico Keyser
Edward Kagiso Molefe, left, and Dr Nico Keyser.

The 2020 supplementary budget comes at a time when the ongoing COVID-19 pandemic is causing widespread disruption in the world’s economy and continues to affect it negatively. Even though the precise economic and social consequences of the pandemic still remain uncertain, there is prevalent agreement between economists and policy makers that it will leave the world overwrought with the uncertainties of the future. According to the International Monetary Fund, the world economy is expected to contract sharply by 5,2% this year, due to the huge lockdown to curtail the spread of the COVID-19 pandemic. The South African economy is also expected to contract by 7,2% in 2020, and according to the Minister of Finance, Tito Mboweni, this is the largest contraction in almost 90 years. Therefore, the South African government currently finds itself in an unfortunate and restricted fiscal position. Minister Mboweni does not have much room to move within his emergency budget and therefore calls for a pragmatic approach, the reprioritisation of expenditure, and the implementation of austerity measures within the public sector and its state-owned enterprises (SOE).

Zero-based budgeting
However, the country should be applauded for responding to this economic shock with a set of unmatched measures. The Minister further highlighted that, for the first time in history, all stakeholders – including the private sector, labour, communities, and the central bank – participated in responding to the storm that came without an early warning system. This has proven the validity of the long-sung gospel that by working together, we can do more. R500 billion of government’s COVID‐19 economic support package was directed straight at the problem. Against the background of ongoing measures to address the pandemic in South Africa, the Minister’s supplementary budget of 2020 stressed several key aspects:

The first burning issue addressed in the supplementary budget was the mounting debt-to-GDP ratio, which is envisaged to reach 80,5% in this fiscal year, as compared to a projection of 65,6% in February. Although the Minister has confirmed strategies to curtail the debt and widening deficit, no sign of stabilisation was presented. South Africa continues to experience contracting revenue and is relying extensively on loans from international sources, since savings is a non-starter. The Minister has also called for zero-based budgeting as one of the strategies in building a bridge to recover, and to close the mouth of the ‘hippopotamus’, which is eating our children’s inheritance. The zero-based budgeting is a big step in the right direction; it will make all role players in government understand the economic crisis we are facing. 

Prioritising infrastructure development
The other positive part of the supplementary budget was the prioritisation of infrastructure development. The South African government has already considered almost 177 infrastructure projects that will assist in boosting the economy and curtailing unemployment. The Sustainable Infrastructure Symposium, hosted by President Cyril Ramaphosa, announced 55 projects that are ready to be rolled out in due course. Government needs to further stimulate its partnership with the private sector to ensure more infrastructure development and job creation. Infrastructure development will also ensure jobs for the unskilled labour force, which makes up the largest part of our unemployment. 
In terms of job creation, an economic support package of R100 billion has been set aside for a multi-year, comprehensive response to our job emergency. Moreover, the President’s job creation and protection initiative will be rolled out over the medium term. This will include a repurposed public employment programme and a Presidential Youth Employment Intervention. The country is looking forward to further details regarding this presidential initiative, particularly with regard to the Presidential Youth Employment Intervention, as the youth is the future of this country.
Despite the envisaged revenue adjustment of R1,43 trillion to R1,12 trillion, the country is expected to continue spending. An additional R21 billion is allocated for COVID‐19‐related health-care spending. The supplementary budget has also proposed a R12,6 billion allocation to front-line services. An additional R11 billion is set aside towards improved water and sanitation, and an additional R6,1 billion for youth employment ensures that the most vulnerable are supported. However, the effectiveness of this allocation in the supplementary budget is sorely dependent on the ability of our government apparatus to spend the money.   

Opening the economy
The only worrying issue that the minister did not dwell on much, was the public sector wage bill, which still remains a challenge. According to the Minister, nearly half of the consolidated revenue will go towards the compensation of public service employees. The compensation of employees continues to put much pressure on service delivery and is pushing government in the direction of borrowing. On the other hand, the government of South Africa is still under pressure to implement the 2020 salary adjustments. However, the question still remains why the South African government is not considering the same process as the private sector or finding an alternative way of setting salaries at an appropriate, affordable, and fair level. This could save government money to focus on other areas that require financing, such as debt-service costs.

What remains evident and feasible is that South Africa should continue opening the economy to revive sectors hit hard by the great lockdown. Allowing trade to take place, doing business, and markets to function would provide the ultimate boost to a struggling economy. A reduced role by government could pave the way for the private sector to play a larger role in the economy. Moreover, structural reforms are required to create a favourable environment for growth and to restore South African fiscal credibility. 

Opinion article by Edward Kagiso Molefe, Lecturer: Department of Economics and Finance, and Dr Nico Keyser, Head of Department:  Economics and Finance

News Archive

‘Is the South African university curriculum ‘colonial'?’ asks Prof Jansen
2017-11-24

Description: Jansen readmore Tags: Prof Jonathan Jansen, colonial, university curriculum, western knowledge

From left; Prof Corli Witthuhn, Vice-Rector: Research; former Rector and Vice-
Chancellor of the UFS, Prof Jonathan Jansen; Prof Michael Levitt, and
Prof Francis Petersen at the celebration lecture at the UFS.
Photo: Johan Roux

One of the critical issues that emerged from the South African student protests during 2015 and 2016 was a demand for the decolonisation of university curriculums. 

A senior professor at the Stellenbosch University, Prof Jonathan Jansen, said the number of people, including academics, who joined the cause without adequately interrogating the language of this protest, was astonishing. “The role of social scientists is to investigate new ideas … when something is presented to the world as truth.” Prof Jansen was speaking during a celebration lecture at the University of the Free State in Bloemfontein on 15 November 2017. 

Large amount of knowledge not African

He said the accusation is correct to a limited degree. “The objection, in essence, is against the centring of Western, and especially European knowledge, in institutional curricula.” There is no doubt that most of what constitutes curriculum knowledge in South African universities, and in universities around the world, derive from the West. “The major theories and theorists, the methodologists and methods are disproportionally situated outside of the developing world,” Prof Jansen said. 

The dilemma is, how will South Africa and the continent change the locus of knowledge production, considering the deteriorating state of public universities? “In the absence of vibrant, original, and creative knowledge production systems in Africa and South Africa, where will this African-centred or African-led curriculum theory come from,” Jansen asked. He says the re-centring of a curriculum needs scholars with significant post-doctoral experiences that are rooted in the study of education and endowed with the critical independence of thought. “South Africa's universities are not places where scholars can think. South African universities’ current primary occupation is security and police dogs,” Prof Jansen said. 

Collaboration between African and Western scholars
“Despite the challenges, not everything was stuck in the past,” Prof Jansen said. South African scholars now lead major research programmes in the country intellectually. The common thread between these projects is that the content is African in the subjects of study, and the work reflects collaboration with academics in the rest of the world. These research projects attract postgraduate students from the West, and the research increasingly affects curriculum transformations across university departments. There is also an ongoing shift in the locus of authority for knowledge production within leading universities in South Africa. Prof Jansen feels a significant problem that is being ignored in the curriculum debate, is the concern about the knowledge of the future. How does South Africa prepare its young for the opportunities provided by the groundswell of technological innovation? “In other parts of the world, school children are learning coding, artificial intelligence, and automation on a large scale. They are introduced to neuroscience and applied mathematics,” he said.

Prof Jansen said, in contrast, in South Africa the debate focuses on the merits of mathematics literacy, and what to do with dead people’s statues.

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