In the medium-term budget policy statement in October, Gigaba presented a cocktail of bad news with no effort to sugar coat the poor state of public finances. But buoyed by an improved inflation outlook, business and consumer confidence and a stronger rand, Gigaba said there was a profound sense of optimism.
“Government has demonstrated its resolve to confront allegations of state capture and corruption through the judicial commission of inquiry announced by former president Zuma and the investigations being conducted by the Hawks, Assets Forfeiture Unit and other agencies,” he said.
Gigaba delivered yesterday’s budget against the backdrop of recovering commodity prices, rising oil prices and improved domestic economic outlook. “The medium-term growth outlook has improved since the 2017 (medium-term budget policy statement), mainly due to an expected increase in private investment as a result of improved confidence,” National Treasury said.
Gigaba revised the 2017 Gross Domestic Product (GDP) growth projection from the 0.7 percent projected in the medium-term budget policy statement to 1 percent.
He said the government anticipated a growth of 1.5 percent in 2018 and 2.1 percent in 2020.
South Africa’s fiscal policy is focused on containing the budget deficit and slowing the pace of debt accumulation.
This is in order to maintain government’s spending programmes.
Meanwhile, Gigaba said the Public Procurement Bill would be submitted to cabinet next month for gazetting for public comments.
“The Bill will enable government to use public procurement strategically to advance transformation, achieve efficiencies and improve governance,” said Gigaba.
He said small medium and micro-sized enterprises (SMMEs) and black-owned companies struggled to participate in procurement as a result.
“We are therefore in the process of reviewing all of these with a view to ending them in the majority of cases,” he said.
He said government was reviewing a number of so-called evergreen contracts which are open-ended.
These, he said, created barriers to entry for new entrants.
Gigaba also alluded to the risks posed by the country’s state-owned companies.
“President Cyril Ramaphosa made an unequivocal commitment in the State of the Nation address to intervene decisively to stabilise and revitalise state-owned enterprises...”
Without reforms to the respective business models of the SOEs, the long-term survival of the public entities was in doubt, he said.
- BUSINESS REPORT