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20 February 2025 Photo Supplied
Prof Johan Coetzee
Prof Johan Coetzee, Chairperson: Department of Economics and Finance, University of the Free State.
Opinion article by Prof Johan Coetzee (MCBI, CMBE), Chairperson: Department of Economics and Finance, University of the Free State.

The Minister of Finance has not had it easy in 2025 and the budget speech not read yesterday pays testament to this. Postponing the speech to 12 March is unprecedented, and is due to the Government of National Unity (GNU) not reaching consensus on a way forward to tabling a budget. It seems as if the fallout was based largely on a proposed 2% increase to VAT that was rejected by two parties. I personally would not have supported this proposal either as the tax burden shifts disproportionally to the poor.

My initial response of the postponement was frustration and disappointment. But I soon realised that it is the outcome of a new government dispensation made up of many voices, and many dissenting at that, becoming more important. In principle, this is good for the nation, but unfortunate for us expecting the budget to be read on the day. It also does not necessarily send a good message to the markets, with the rand weakening by more than 1% within an hour of the announcement. There could also be knock-on effects that a later tabling will have on service delivery and operations of government. After some reflection, however, I have concluded that on balance, the decision to postpone is not as problematic as many have made it out to be over the past 24 hours. Clearly there are many balls to juggle by Minister Enoch Godongwana and many added complexities that have both national and international dimensions.

Lead-up to the budget

Internationally the strong nationalist policy drive by US President Donald Trump has already shown that the ‘make America great again’ mantra is alive and well as reflected in the intentional actions taken against South Africa since his second term started in January. We will see how this plays out over the coming months, but my view is that South Africa as a nation needs to be more deliberate in its policy agenda. We are at an inflection point where we must reflect on who we are as a nation and where we want to be down the line. We cannot afford to rely on handouts from other nations. There is more opportunity to this situation than threat, but we need intentional leadership to exploit it.

My big concern in the lead-up to the budget speech was that the minister would not take a firm stand on fighting the culture of non-compliance within state entities which has invariably led to unsustainable levels of irregular expenditure. For the 2023/24 financial year, the Auditor-General of South Africa reported that irregular expenditure totalled almost R50 billion, up from just over R27 billion the previous year. To put this into perspective, irregular expenditure equals approximately 2.2% of total government spending for the 2023/24 fiscal year. This might not seem significant stated as a percentage, but it has basically doubled since the previous year, and every preceding year before that too. Moreover, irregular expenditure equates to approximately 20% of the 2023/24 social grants budget and just about equals the 2024 National Student Financial Aid Scheme allocation. This is clearly a management failure and nothing seems to have been done about it over the years. As a result, the problem is escalating at an alarming rate. It is quite astounding that accountability management is not more explicit as it is clearly a very unpopular political message to send. But at what cost?

South African economy is not growing

To make matters worse, the South African economy is not growing both enough and fast enough. The most recent real GDP growth figure showed a decrease of 0.3% in the third quarter from the second quarter of 2024. Since 1994, the period with the highest annual rate of growth was a three-year period from 2005 to 2007 where growth exceeded 5% for each respective year. This period preceded the global financial crisis and since then, growth has struggled to reach 3% annually, doing so on only two occasions barring the 4.7% in 2021 which was not a true reflection of reality given the low base of the preceding year amid the COVID-19 pandemic. This is a major concern for the Minister, because with economic growth comes increased tax revenues, which in turn capacitates better budget management. Very simply, the more people spend; the more businesses sell; the larger the profit outcomes; the larger the tax revenue collections. If the economy grows, the fiscus collects more tax revenues without explicitly increasing tax rates. This built-in cyclical dynamic is simply not happening and creates a serious constraint on the ability of the Minister to manage deficits going forward.

Further to this of course is that as deficits are run, all things remaining constant, public debt increases. The public-debt-to-GDP ratio for 2023/24 already exceeds 72% which is higher than the generally accepted benchmark of 60% and almost 2.6 times what it was in 2008 (27.8%). This has resulted in the average interest on public debt approximating R1.1 billion a day, equating to about 22% of total tax revenues, or almost 20% of total government spending respectively. To put it differently, for every R1 government spends, 20 cents is first channelled to pay the interest on the debt before any spending occurs on roads, education, infrastructure, social grants and the like. These are deeply concerning figures in an economy with already high levels of unemployment and inequality.

Might be beginning of something better

There is a leadership void that cannot be ignored anymore. It needs to be intentional and deliberate. The GNU provides the platform to exploit ‘the best that South Africa has to offer’ as it promotes a broad-based and more inclusive political structure and played itself out yesterday. I welcome this in principle, but my concern is that political in-fighting will prevail and perverse politicking will trump working together in the best interests of the South African people. Although the postponement could be interpreted negatively in terms of the GNU not being able to find common ground, I think it is rather a sign of more rigorous engagement and the enablement of a collaborative environment amongst parties in the decision-making structures of the state. Remember this day as it might be the beginning of something better than what we are used to. 

News Archive

Official opening ceremony of the UFS Qwaqwa Campus
2006-02-15

Official opening ceremony of the UFS Qwaqwa Campus
11th February 2006 – Multipurpose Hall

Opening Speech:
Prof. Peter A. Mbati
Campus Principal

Successfully rising to the challenges of incorporations and mergers – developing a vibrant and academically stimulating satellite campus of the University of the Free State.

Thank you Mr. Program Director and good morning ladies and gentlemen.

I wish to once again welcome all of you to the official opening ceremony of the University of the Free State QQ campus.  Thank you for taking time to share with us an important date in our campus academic calendar.  I bring you greetings from our Rector and Vice Chancellor Prof. Frederick Fourie.

During such occasions we try and reflect on important matters that have affected us as an institution in the preceding year, commit ourselves to specific objectives for the current year, while planning for the proceeding year.

Today I shall be talking on Successfully rising to the challenges of incorporations and mergers – developing a vibrant and academically stimulating satellite campus of the University of the Free State’.

SRC inauguration
I would like to congratulate the SRC President and the entire SRC leadership for being elected into important positions of student leadership and authority. 

As a university we are proud of the quality of our student leadership on the Qwaqwa campus.  I am confident that you young leaders will rise to the challenges of your office and discharge your duties with diligence and without fear or favour.  That you will rise above your party affiliations and provide effective leadership to the entire student body on campus.
                              
Leadership is complex and requires you to be objective, just and fair in your approach to the many challenges that you will encounter.  You will be judged not by the populist decision that you take when confronted with difficult choices, but rather, on the wisdom that you exercise in reaching consensus in decision making processes.

The era when management and student leadership viewed each other with suspicion and as adversaries is long gone.  Management, academic and administrative staff, parents and students must have common agendas in as far the  quality growth and development of our university is concerned and to strive towards academic excellence.  I leave the challenge to you students, and more so to the inaugurated student leaders to define your agenda in achieving this noble objective.  I trust that you will make the right choices.

Brief history of incorporation
On the recommendations of the National Working Group of Higher Education, the Qwaqwa Campus of the then University of the North was incorporated into the University of the Free State on 1st January 2003.  We suddenly had to move from a campus that was originally semi-autonomous and with its own culture developed over almost 20 years, into a campus that had to operate as a fully integrated campus of the UFS, a 100 year old institution with its distinct culture.

Following incorporation, we not only had to continue with our core business of teaching, learning, research and community service, but we also had to engage in other important aspects such as exploring the most appropriate models of governance for the campus, encouraging dialogue and interactions at all levels between personnel at the different campuses with a view to developing trust between colleagues. And with the added dimensions such as participation in the transformation task team we in effect are at the fore front of developing a new institutional culture at the UFS and a truly South African University.

UFS Strategic objectives
The strategic and transformation priorities of the University of the Free State for 2006 – 2008 as approved by the Executive Management at its retreat in January 2006 are:

  • Quality and Excellence
  • Equity, diversity and redress
  • Financial sustainability
  • Regional co-operation and engagement

Central to this priority is the integration of the Qwaqwa campus as a valuable constituent part of the UFS, and the strategic reconfiguration of the campus in order that the UFS can play a meaningful role in regional engagement and development.

  • National leadership

The five strategic objectives cannot be viewed in isolation and run simultaneously and in concert with each other. 

The Question must therefore be what we on the QQ campus, staff and students, parents and our broader community are willing to do to achieve these strategic objectives. The reconfiguration and strategic planning of this campus, and therefore its success, must be a collaborative effort between colleagues at QQ and on the main campus.  We must all be ready to work together, to plan together, to shoulder responsibilities together and sometimes, to share the pain and disappointments together. 

The second question must therefore be: are we prepared to go that extra mile for our campus to ensure that we claim our rightful stake within the ranks of well respected academic institutions of higher learning in this country?  At this point in its history this campus requires committed men and women from across the cultural spectrum who appreciate the challenges ahead of us and who are ready to give of their best and to constructively engage at all levels to make this dream a reality.  Because this dream is possible and this dream will be realized!

Quality and Excellence (1st strategic objective)

As mentioned by the Rector in his speech at the official opening ceremony of the university on the main campus on Friday 3rd February, the university will in 2006 pay extra attention to Quality and Excellence.  This is informed by the Higher Education Quality Committee’s (HEQC) institutional audit which is scheduled to take place this year.  Our university as well as several other HEI’s will be subjected to this audit.  This will call for a lot of hard work on your part in preparation for a successful audit and in this regard therefore I request for your cooperation.

As a further step in confirming our commitment to quality and excellence, we have simultaneously introduced on the QQ campus and the main campus workshops on performance management systems to a cohort group.  This will be expanded in 2006 to a wider group of managers on the QQ campus to include among others all Program Heads and Subject Heads. PMS is an invaluable tool for fair, effective and efficient management of a very important resource on campus – the human resource.  Benefits of PMS include among others:

  • Instilling and enriching a culture of performance management (quality assurance) as an integral part of the day to day functioning of staff at the campus
  • Improving staff performance through mentoring, development and training

Tri campus project
One of the more important projects that we as a university undertook in 2005 was the Tri Campus Project which was coordinated by the Free State Higher Education Consortium (FSHEC) through Niel Butcher and Associates consultants.

The Tri-Campus project focused on the strategic planning for higher education campuses in the Free State that have been incorporated with UFS and CUT during the reshaping of the South African higher education landscape. The Bloemfontein Vista campus and the Qwaqwa campus of the University of the North were incorporated with the UFS, and the Welkom Vista campus with the CUT.

The planning process involved a range of research and consultation activities during the course of 2005. This included:

  • Conducting situational analyses of the Qwaqwa campus during which staff and students were widely consulted;
  • Consulting with the campus and with a range of stakeholders in the sub-region
  • Review of the Free State Provincial Growth and Development Strategy and Integrated Development Plans (IDPs) of the regions and other research of relevance to the sub-regions, province and country.

An operational framework for the reconfiguration of the campus with a range of possible Program Qualification Mixes has been produced.  In December 2005, the Rector, the Vice Rector Academic Planning Prof. Magda Fourie and I discussed this document with senior members of the DoE in Pretoria, and we will soon be meeting with the National Minister of Education Me Naledi Pandor for her guidance and to seek support in the further refinement of the document and subsequent implementation.

Recapitalization
This year a further R 6 M has been budgeted for recapitalization.  In about two weeks time the third of phase of renovations on campus will commence and attention will be given to the administration building, the humanities and the outstanding work in the lecture hall complex.  There- after the library, sciences and education buildings will follow.  As you will recall a substantial portion of the R 8.4 million in 2005 was used to upgrade the student residences and the lecture hall complex.

I am certain that the renovations and upgrading of our infrastructure and physical facilities including landscaping will create an enabling environment for you to enjoy your work and studies on this campus.

Renovations come with some measure of inconveniences and I therefore wish to request for your patience and support during this period.

Closing remarks
There is a heightened spirit of optimism on what the future holds for this campus.  This is evident when I talk to a large cross section of staff and students of this campus – and I therefore invite all of you to come and be partners with us on this journey of optimism and hope of what the future holds for the UFS – QQ campus.

Thank you and God bless!

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