The only obvious silver lining we see in the medium-term budget policy statement delivered by Finance minister Enoch Godongwana on Wednesday seems to us to be the planned fast tracking of the growth enhancing reforms to the economy to include a financing mechanism for large infrastructure projects.
The detail of this development will be announced by President Cyril Ramaphosa at some undisclosed date, declared Godongwana in his policy statement.
Talk is always cheap. South Africans are heavily burdened by our poor performing economy, and so await (im)patiently the president’s pronouncement on this.
It seems to us, and to many economists who commented on the policy statement, that a large infrastructure programme is the most potent artillery the country could use to create jobs and make a massive dent on the ever-growing unemployment numbers.
Our infrastructure is crumbling. The bridges are as old as the hills; our road infrastructure requires not revamping but rebuilding; our cities, towns, and villages are crumbling, and Johannesburg, a city of great pride to many, is not only falling apart but has also become a shockingly crime-ridden place of despair.
The railway stock – which includes the passenger rail, an affordable mode of transport for the working class – is on its deathbed, and requires emergency treatment.
If we put our mind to it, and using the infrastructure spending, we could stimulate the economy and create millions of jobs for the suffering South Africans.
So, we urge Ramaphosa and his cabinet to prioritise a financial mechanism to ensure the infrastructure project gets off the ground, because, to reiterate, it is the only sensible way to kick-start our slagging economy.
As we have said in this leader, talks and plans must be turned into concrete reality. There is no time to waste: South Africa is in crisis. Quick effective intervention is urgently required.
We have highlighted things that could give us hope and turn around the economy for the better. Yet it would be wrong to gloss over challenges facing the economic well-being of this nation.
Most troubling, and something that ought to keep us awake at night, is the hard reality that the country’s borrowing patterns continue to surge, far beyond our means.
To keep the financial crunch at bay, and our economy afloat, we need to borrow from the markets a staggering R553-billion a year over the medium term, says Godongwana.
That is heavy stuff
There can be no escaping that the country is in a grave situation. The country’s main budget deficit forecast for the current financial year stands at 4.9% of the gross domestic product – with the gross debt to rise from R4.8-trillion in the current financial year to R6-trillion in the 2025/6 financial year.
In the end, the numbers we crunch reveal something profound. Those who run this country with ulterior motives of looting state resources endanger the future of the whole country.
