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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

First doctorate in Thoracic Surgery in Africa awarded
2009-05-12

The University of the Free State (UFS) has become the first university in Africa to award a Ph.D. degree in Thoracic Surgery. The degree was conferred on Prof. Anthony Linegar from the university’s Department of Cardiothoracic Surgery during its recent graduation ceremony.

Thoracic surgery is a challenging subspecialty of cardiothoracic surgery. It began in South Africa in the 1940s and is a broad medico-surgical specialist discipline that involves the diagnosis, operative and peri-operative treatment of acquired and congenital non-cardiac ailments of the chest.

Prof. Linegar became the first academic to conduct a mixed methods analysis of this surgical specialty, which included a systematic review of all the research done in this field in South Africa. The title of his thesis is A Model for the Development of Thoracic Surgery in Central South Africa. The research was based on the hypothesis of a performance gap between the burden of disease in the community and the actual service provision. It makes use of systems theory and project management concepts to develop a model aimed at the development of thoracic surgery.

The research proved that there is a significant under provision of clinical services in thoracic surgery. This was quantified to a factor of 20 times less than should be the case, in diseases such as lung and oesophagus cancer. According to Prof. Linegar, there are multiple reasons for this. Listed amongst these reasons is the fact that thoracic surgery is not part of the undergraduate education in medical training. There tends to be a low level of awareness amongst clinicians as to what the thoracic surgeon offers their patients. The diagnostic and referral patterns in primary and secondary health facilities, where diseases must be picked up and referred early, are not functioning well in this regard. In addition, relatively few cardiothoracic surgeons express an interest in thoracic surgery.

Prof. Linegar’s model is named the ATLAS Mode, which is an acronym for the Advancement of Thoracic Surgery through Analysis and Strategic Planning. It includes the raising of awareness of the role of the specialist thoracic surgeon in the treatment of patients with thoracic diseases as part of the solution to the problem. Furthermore, it aims to develop an accessible and sustainable specialist service that adequately provides for the needs of the community, and that is appropriately represented in health administration circles.

His promoters were Prof. Gert van Zyl, Head of the School of Medicine at the UFS, Prof. Peter Goldstraw, from the Imperial College of London, United Kingdom (UK) and Prof. Francis Smit, Head of the Department of Cardiothoracic Surgery at the UFS.

Prof. Linegar has been with the UFS since 2004, is a graduate from Stellenbosch University in 1984 and completed his postgraduate training in Cardiothoracic Surgery at the University of Cape Town. He was granted a Fellowship in Thoracic Surgery at the Royal Brompton Hospital in London, UK and has since held consultant positions at the UFS, Stellenbosch University and in private practice. He has been involved in registrar training since returning from the UK in 1994 and has extensive experience in intensive care medicine. He has published widely, has presented papers at many international conferences, has been invited as a speaker on many occasions and has won awards for best presentation on three occasions.

Media Release
Issued by: Lacea Loader
Assistant Director: Media Liaison
Tel: 051 401 2584
Cell: 083 645 2454
E-mail: loaderl.stg@ufs.ac.za  
12 May 2009
 

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