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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

UFS awards honorary doctorates during its centenary week
2004-10-07

The University of the Free State (UFS) will award 12 honorary doctorates on Thursday 14 October 2004 to a diverse group of outstanding South Africans and international experts.

This will be the last in a group of 18 honorary doctorates that the UFS will be awarding in its centenary year.

The awards comprise of a number of well-known language experts and writers, experts in higher education, first-time awards in community service and development studies, as well as music.

“This reflects quality and also diversity, a spectrum of convictions as well as the recognition of persons who played a major role in changing society in the last couple of decades, “ says Prof Frederick Fourie, Rector and Vice-Chancellor of the UFS.

The awards can be grouped in the following categories:

Language and literature:

Mr Karel Schoeman (D Litt (hc)) – well-known Afrikaans author and former student of the UFS. Some of the awards he has received include the Hertzog prize for prose (1970, 1986 and 1995), the CNA prize (1972 and 1994), the Old Mutual prize (1985 and 1991), the SABC prize for best television drama in 1990, the M Net book prize in 1997 and the State President award (former President Nelson Mandela: Order for Excellent Service – silver) in 1999. It is an honor for the UFS to have this gifted and creative person among its former students. This conferment is a fitting recognition of his status as leading South African writer.

Ms Antjie Krog (D Litt (hc)) – well-known South African poet and former student of the UFS. Her popularity as poet is evident in her piercing honesty and unequalled power of expression. Some of the awards she has received include the Eugéne Marais prize in 1973, the Rapport prize in 1987, the Hertzog prize in 1990 and the RAU prize in 2000. Her writing has been translated into seven languages. She has also received numerous honors for her involvement in and journalistic documentation of the Truth and Reconciliation Commission’s (TRC) proceedings. It is therefore an exceptional privilege for her alma mater to honor her with an honorary doctorate.

Prof Jaap Steyn (D Litt (et phil) (hc)) – recently, Prof Steyn again distinguished himself as biographer whose thorough research is apparent in the published biographies of illustrious writers such as NP van Wyk Louw and MER. The numerous awards, among which the Stals prize from the South African Academy of Science and Art for the Van Wyk publication, are a matter of record. He conducted the research for this great prize-winning work as honorary professor at the UFS.

Prof Jakes Gerwel (D Phil (hc)) – Chancellor of the University of Rhodes and Director of Naspers, Old Mutual, Gold Fields and Brimstone. His doctoral thesis was published in The Netherlands under the title Literatuur en apartheid. Konsepsies van “gekleurdes” in die Afrikaanse roman tot 1948 (1983). He received an honorary doctorate from Clark College ( Atlanta), the City University of New York and Missouri in the USA, the University of the Western Cape, the University of Cape Town, the University of Natal, Rhodes University, the University of Stellenbosch and the University of the Witwatersrand. He is also outstanding professor in the Humanities at the University of the Western Cape, honorary professor in the Humanities at the University of Pretoria, and was the chairman of the Human Sciences Research Council (HSRC).

Development Studies:

Dr Frederick van Zyl Slabbert (D Phil (hc)) – for his academic achievements, his endeavors for bringing about a peaceful transition in South Africa and his demonstration of the social investment role of the corporate sector. Dr Van Zyl Slabbert has received honorary degrees from the University of Natal and the Simon Fraser University in Canada. He has published seven books and various academic articles.

Community Service:

Prof Robert G Bringle (D Phil (hc)) – from the Indiana University-Purdue University Indianapolis (IUPUI) in the USA. He is currently Chancellor’s Professor of Psychology and Philanthropic Studies at the IUPUI and also Director of the IUPUI’s Centre for Service Learning. He is honored for his exceptional contribution to several of the UFS’s community service projects as well as his role in the advancement of a multi- and inter-disciplinary approach to academic development and the integration of service learning within the faculties of the UFS. He has also made a valuable contribution to the conceptual framework of the UFS’s unique community service policy and more recently to the advancement of a research culture regarding community service.

Higher education:

Dr Khotso Mokhele (D Phil (hc)), President of the National Research Foundation (NRF) is honored for his contribution to the South African higher education sector. He has also made a substantial contribution to the development of the research capacity of universities and technikons in South Africa. Dr Mokhele was born in Bloemfontein and matriculated at the Moroka High School in Thaba Nchu.

Prof Saleem Badat (D Phil (hc)), the Chief Executive Officer of the Council on Higher Education (CHE). Prof Badat has devoted himself to transforming and building South African higher education, and has constantly challenged the higher education sector to retain the moral basis of higher education and tackle its challenges with intellectual honesty, ingenuity, creativity and courage. He is honored for his intellectual leadership in the development of a equitable, just and quality higher education system in South Africa.

Law:

Prof HA (Boelie) Wessels (D Legum (hc)) – for his contribution to the fields of Roman Law, Legal History at the UFS. He is currently a part-time lecturer at the UFS’s Faculty of Law.

Medicine:

Prof CJC Nel (D Phil (hc) Posthumous) – for the way in which he strived for the advancement of excellent medical education in the country. Prof Nel also did pioneering work in the field of transformation in higher education. Under his guidance the School of Medicine at the UFS became one of the first medical schools to adopt a parallel-medium system of instruction.

Music:

Prof Leo Quayle (D Mus (hc)) – for the significant contributions he has made to the development of music – not only in Bloemfontein, but also on national level and abroad. His initiative, enthusiasm and dedication contributed to the eventual founding of the Free State Musicon, as well as the first symphony orchestra and the first string quartet in Bloemfontein. Prof Quayle is a former head of the Department of Music at the UFS.

Prof Jack de Wet (D Mus (hc)) – well-known for his exceptional contribution to violin tuition in South Africa. As pedagogue of international stature, he still moulds violinists who compete at national and international level. At an advanced stage of his career, he still actively conveys his knowledge, experience and distinctive insight in his field of speciality to yet another new generation of young violin teachers. Today the symphony orchestras in Bloemfontein and Port Elizabeth also stand on the foundations laid by him.

Media release
Issued by: Lacea Loader
Media Representative
Tel: (051) 401-2584
Cell: 083 645 2454
E-mail: loaderl.stg@mail.uovs.ac.za
7 October 2004

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