Latest News Archive

Please select Category, Year, and then Month to display items

2020 supplementary budget: The road map to the revival of the economy

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

Molefe and Kesyer_web read more — 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

Ensure your place at the UFS

2010-10-27

The University of the Free State (UFS) appeals to all prospective South African students who want to come and study at the UFS in 2011 to submit their applications no later than Tuesday, 30 November 2010.

The UFS is aware of the fact that learners will not have received their final Grade 12 results by Tuesday, 30 November 2010; therefore provisional admission will be granted based on learners’ most recent Grade 12 results. Final admission will take place upon receipt of the final Grade 12 results, which will be available early in January 2011.

Prospective students can obtain application forms for admission at the following places:

The UFS’s web site at www.ufs.ac.za,
The Information Office (Unit for Prospective Students) at the Thakaneng Bridge on the UFS’s Main Campus in Bloemfontein,
You may also send an e-mail to info@ufs.ac.za or
Phone 051 401 3000 and the necessary forms will be posted to you.

Senior undergraduate students (that is all students who were registered up to and during 2010 at the UFS) as well as post-graduate students, must self-register electronically on-line from Monday, 1 November 2010 until Tuesday, 4 January 2011. This includes master’s and doctoral students.

In order to encourage senior students to register online, the UFS offers 20 laptops as incentives for the senior students who successfully register online from 1 November 2010. These laptops will be handed over to the winners after the registration process in 2011.

Registration of first-year students:

The Rector and Vice-Chancellor, Prof. Jonathan Jansen, will welcome first-year students on Friday, 14 January and Saturday, 15 January 2011, respectively, in the Callie Human Centre. The Faculties of Economic and Management Sciences, the Humanities and Education will be welcomed on 14 January 2011 and the students of the Faculties of Natural and Agricultural Sciences, Law and Theology shall be welcomed on 15 January 2011. The compulsory orientation programme for new first-years will also then commence.

From 17 to 21 January 2011 first-year students will receive academic advice at the Callie Human Centre, whereafter they will be referred for self-registration. These processes will take place according to the set timetable. This timetable is available in the Kovsie Guide that will be sent to learners as soon as we have received their applications, as well as on the web site of the UFS at www.ufs.ac.za/register2011.

First-year students’ fees must be paid prior to arrival on 14 and 15 January 2011.

Registration of senior students:

Senior students who experience problems with the electronic on-line self-registration process have the opportunity to resolve problems within a programme on campus from Wednesday, 5 January until Wednesday, 12 January 2011. This programme will be sent out to students and is also available at www.ufs.ac.za/register2011. The specific scheduled day for senior students to resolve problems is the last and only day to resolve the problem.

Senior students can also contact 051 401 9111 for more information in this regard.

Students may register for prescribed modules for 2011, even though the November 2010 examination results are not yet available. Changes resulting from examination results that are made available later can be done up to and including 28 January 2011.

In terms of applications for senior students, only students who have interrupted a calendar year of study need to re-apply for admission.

Registration of students at the UFS’s Qwaqwa Campus:

Senior and first-year students of the UFS’s Qwaqwa Campus register from Wednesday, 12 January until Friday, 28 January 2011 in the Nelson Mandela Hall on this campus.

Registration of students at the UFS South Campus:

First-year students from the UFS’s South Campus in the University Preparation Programme and the Extended Programme (only Natural and Agricultural Sciences) register from Monday, 24 January till Friday, 28 January 2011 in the Arena Hall on the South Campus.

Students who have successfully completed the University Preparation Programme register with the first-year students on the UFS Main Campus on Friday, 14 and Saturday, 15 January 2011 – according to faculties (cf. paragraph 6).

Lectures for all students shall commence on Monday, 24 January 2011.

MEDIA RELEASE
Issued by: Lacea Loader
Director: Strategic Communication (actg)
Tel: 051 401 2584
Cell: 083 645 2454
E-mail: loaderl@ufs.ac.za
26 October 2010

Back

Economic and Management Sciences

Education

Health Sciences

The Humanities

Law

Natural and Agricultural Sciences

Theology and Religion

Open Distance Learning

Business School

We use cookies to make interactions with our websites and services easy and meaningful. To better understand how they are used, read more about the UFS cookie policy. By continuing to use this site you are giving us your consent to do this.

Accept