Finance Minister Tito Mboweni. Waldo Swiegers/Bloomberg
Finance Minister Tito Mboweni. Waldo Swiegers/Bloomberg
The rating agencies have continued to place caution on South African economic environment. Photo: Reuters
The rating agencies have continued to place caution on South African economic environment. Photo: Reuters
The rating agencies have continued to place caution on South African economic environment. Photo: Reuters
The rating agencies have continued to place caution on South African economic environment. Photo: Reuters
The rating agencies have continued to place caution on South African economic environment. Photo: Reuters
The rating agencies have continued to place caution on South African economic environment. Photo: Reuters

JOHANNESBURG – Progressive Professionals Forum (PPF) notes and welcomes the State of Nation Address (SONA) as delivered by President Cyril Ramaphosa which articulated the overall government plans detailing specific interventions to grow the economy, dealing with scourge of corruption, unemployment, transformation, law and order, security, education, social services and international relations. The interweaving thread of the SONA being to get South African economy growing and inspiring hope to the nation.

The budget speech happens against the backdrop of a depressed economy, high unemployment, massive poverty, corruption and maladministration across the various spheres of government with critical state-owned enterprises (SOEs) affected the most.

As though that is not sufficient reasons for despair, the rating agencies have continued to place caution on South African economic environment, while to make matters worse the revenue base continues to shrink with more retrenchments being mooted both in private and public sector.

PPF cautions that a value-added tax (VAT) increase is not a viable option this time. It is commendable that the impact has been minimal because of the zero-rated food basket items so as to lessen the VAT increase impact on the poor.

PPF would like to see increased spending on Small and Medium Enterprises (SME), particularly favouring black small and medium-sized businesses. PPF believes strongly that the SME sector is critical to efforts for economic growth, dealing with the perennial problem of unemployment and poverty.

PPF also hopes that before the minister of finance can announce any bailouts on SOEs, some measures on the review of their business plans and models of South African SOEs requires urgent attention, otherwise, any bailout of SOEs based on some old business models would be equal to throwing money to problems and a black hole without positive outcomes ever being possible.

PPF also noted the proposed unbundling of ESKOM into specialization entities under the ESKOM Holdings company, initially our view is to cautiously welcome the intervention, however, we would like to advise and note that such actions should not be a precursor for privatization of the critical economic entity as that would have a dire effect.

PPF would also like to see serious steps being undertaken to address the chronic ailments of governance and management at the National Student Financial Aid Scheme (NSFAS) beyond increased government funding. The NSFAS continues to be bedevilled by inefficiencies which militate against the government"s commitment to providing free education. Every year students from poor backgrounds have to contend with boycott actions in order to seek government attention to the plight of young people in a quest for obtaining higher education and extrication to poverty.

NSFAS administrative failures not only budget constraints are always central to these strike actions, it is our advise as PPF that as part of the Budget Speech, the minister of finance should announce measures envisaged to address the NSFAS problems as the institution is central to the working class' access to education.

PPF further urges the minister of finance to make announcements around review of the compensation regime for essential workers, in this instance essential workers being the nurses, teachers, police, social workers and soldiers. These are workers who are at coal-face of government service delivery to our people and its always ever important to ensure their well- maintained motivation as these professions have been neglected over the years.

PPF expects that as part of the funding plans for basic education, the minister of finance should include the funding for early childhood development incorporation to basic education, effectively migrating it from social development. In the absence of such a budget expropriation the president’s announced a merger of early childhood development to basic education would amount to lip service.

PPF would also desire an announcement on the on the establishment of the state bank. Financial services industry continues to be a thorn in the side of the SA economy while it also remains one of the most untransformed industries in the country. PPF expects and desires that the minister of finance makes announcements towards transforming this crucial industry.

PPF continues to call for legislation for the micro-businesses (Spaza shops, barbershops, salons, etc) to be placed under exclusive local ownership, this effectively would provide social stability in our communities who experience attacks of these types of businesses that are owned by foreign nationals.

Furthermore, PPF desires an announcement on the legislation for the security industry to only employ South Africans. These legislative measures will seek to stabilizes the social environment while also placing national security back at the centre of economic revival.

PPF urges the minister to earmark at least R10 billion for purposes of encouraging entrepreneurial innovation, tax incentives for new product development.

South African credit and insurance criteria requires revisiting to reverse the discriminatory nature of these products to black South Africans and more particularly black businesses, effectively curtailing black participants economically.

Azania Matiwane is managing director of Maxima Advisors, a registered financial services provider, Western Cape Provincial Secretary of the Progressive Professionals, an entrepreneur and a philanthropist. The views expressed here are his.

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