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06 March 2020 | Story Valentino Ndaba | Photo Stephen Collett
Lesetja Kganyago, Governor of the South African Reserve Bank
Reserve Bank Governor, Lesetja Kganyago, presented a public lecture at the UFS on 4 March 2020.

With a 7% fiscal deficit on the Gross Domestic Product (GDP) projected by the National Treasury for the 2020/21 financial year, it would not take long to arrive at a dangerous level of debt at the rate that South Africa is borrowing. Although the South African Reserve Bank Governor, Lesetja Kganyago, does not consider a debt to GDP rate of 60% a disaster, he did express his concern regarding the country’s fiscal deficits being over 6% of the GDP.

Governor Kganyago presented a public lecture at the University of the Free State (UFS) on 4 March 2020, focusing on how we should use macro-economic policy and its role in our economic growth problem.

Unsustainable policies 
South Africa’s fiscal situation is not about tight monetary policy. According to the Governor: “Weak growth is endogenous in our fiscal problems. We cannot keep doing what we are doing and hope that growth will recover and save us. Growth is low, in large part, because of unsustainable policy.”

Avoiding an impending crisis
To address the problem, as a policymaker with more than 20 years’ experience, the Governor suggested that the recommendations made by Minister Tito Mboweni be taken into consideration. “The Minister of Finance, Tito Mboweni, is a man who says things that are true even when they are unpopular. His message is that we have to reduce spending and he is right to put this at the centre of our macro-economic debate,” said Governor Kganyago.

The state needs a radical economic turnaround strategy which is able to diminish the risk of losing market access and being forced to ask the International Monetary Fund for help. Governor Kganyago is positive that such a reformative tactic would go beyond monetary policy and ensure that the interest bill ceases to claim more of South Africa’s scarce resources. 

News Archive

Water research aids decision making on national level
2015-05-25

Photo: Leonie Bolleurs

With water being a valuable and scarce resource in the central regions of South Africa, it is no wonder that the UFS has large interdisciplinary research projects focusing on the conservation of water, as well as the sustainable use of this essential element.

The hydropedology research of Prof Pieter le Roux from the Department of Soil, Crop and Climate Sciences and his team at the UFS focuses on Blue water. Blue water is of critical importance to global health as it is cleared by the soil and stored underground for slow release in marshes, rivers, and deep groundwater. The release of this water bridges the droughts between showers and rain seasons and can stretch over several months and even years. The principles established by Prof Le Roux, now finds application in ecohydrology, urban hydrology, forestry hydrology, and hydrological modelling.

The Department of Agricultural Economics is busy with three research projects for the Water Research Commission of South Africa, with an estimated total budget of R7 million. Prof Henry Jordaan from this department is conducting research on the water footprint of selected field and forage crops, and the food products derived from these crops. The aim is to assess the impact of producing the food products on the scarce freshwater resource to inform policy makers, water managers and water users towards the sustainable use of freshwater for food production.

With his research, Prof Bennie Grové, also from this department, focuses on economically optimising water and electricity use in irrigated agriculture. The first project aims to optimise the adoption of technology for irrigation practices and irrigation system should water allocations to farmers were to be decreased in a catchment because of insufficient freshwater supplies to meet the increasing demand due to the requirements of population growth, economic development and the environment.

In another project, Prof Grové aims to economically evaluate alternative electricity management strategies such as optimally designed irrigation systems and the adoption of new technology to mitigate the substantial increase in electricity costs that puts the profitability of irrigation farming under severe pressure.

Marinda Avenant and her team in the Centre for Environmental Management (CEM), has been involved in the biomonitoring of the Free State rivers, including the Caledon, Modder Riet and part of the Orange River, since 1999. Researchers from the CEM regularly measures the present state of the water quality, algae, riparian vegetation, macro-invertebrates and fish communities in these rivers in order to detect degradation in ecosystem integrity (health).

The CEM has recently completed a project where an interactive vulnerability map and screening-level monitoring protocol for assessing the potential environmental impact of unconventional gas mining by means of hydraulic fracturing was developed. These tools will aid decision making at national level by providing information on the environment’s vulnerability to unconventional gas mining.

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