While there might be a difference of opinion on how to address the myriad of challenges facing South Africa, the Government of National Unity (GNU) agrees on the strategic task of fiscal consolidation.
Addressing the RMB-Sunday Times post-Medium Term Budget Policy Statement (MTBPS) dialogue, Finance Minister Enoch Godongwana said while working on the budget, there was a unity of purpose on fiscal consolidation.
"Doing the budget under the GNU was easy. We have the Minister’s committee on the budget. The three major budgets are represented there. There was not a single descending voice because we agree on the strategic task of fiscal consolidation.
“We are working very well [together]. We may differ on some issues but on substantive matters, we are on the same page. Despite what the analysts say, the GNU will be here for five years because there is a commitment with those in government to make it work and deliver,” the Minister said recently in Cape Town.
Minister Godongwana delivered the first MTBPS recently to Parliament since the GNU was established in the seventh administration.
Growing the economy
Minister Godongwana emphasised that South Africa’s big challenge was growing the economy.
“If we had a growing economy, we would solve the issues of unemployment, poverty and the problem of debt. If we had a growing economy, we would have the capacity to service the debt. South Africa has to refocus on growing the economy. We have had a growth problem for more than a decade,” the Minister said.
To strengthen efforts to grow the economy, National Treasury has identified four pillars to lift the economy to a higher and more inclusive growth path.
The strategy is anchored on four pillars:
• Creating a conducive environment based on maintaining macroeconomic stability;
• Implementing structural reforms;
• Supporting growth-enhancing infrastructure; and
• Building State capability.
National Treasury has forecast a real Gross Domestic Product (GDP) growth of 1.1% in 2024 domestically.
This is lower than the estimate of 1.3% in February. Over the medium-term, growth is forecast to average 1.8%.
“This underscores the need for higher inclusive growth to meet the aspiration of a better life for all. Pillar one is about a stable, transparent and predictable macroeconomic framework that creates a conducive environment for businesses and households to save, spend, invest and grow.
“The second phase will also introduce new focus areas that seek to strengthen local government, harness digital infrastructure and integrate urban environments to make cities more efficient.
“Pillar three is about effective infrastructure investment, to boost economic activity and enable higher growth over the medium term,” the Minister said.
Government is also implementing initiatives like early retirement, not to merely reduce the size of the workforce, but also to introduce younger talent to the public service.
- SAnews.gov.za
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