#BUDGET2022: SA’s Economy Battling to Stay Afloat

Feb 23, 2022 | Press Releases

Today’s Medium Term Budget Policy Statement (MTBPS) delivered by Finance Minister, Enoch Godongwana, truly reflects the poor state of our economy.

Tragically, many of the costed plans may never come to fruition if those who continue to steal from the state are not held accountable and never end up behind bars.

It is most worrying when Treasury officials must find creative ways to hide the absolute cost of our debt, by dividing the trillions of rands owed between every South African. Just over R69 000 per person, multiplied by the current population of 59 million, would amount to an estimated R4.3 trillion. This is set to increase to R5.4 trillion over the medium term.

This does not bode well for investors, nor does it secure our country’s sovereign position, as we will have to sell off state-owned assets to the highest bidder.

The Finance Minister missed an opportunity to once and for all deal with the future of State-Owned Entities (SOEs), opting to leave the country waiting in anticipation for the outcome of the Presidential SOEs Council.

It is distressing to hear that Eskom will continue to get financial assistance to the tune of R88 billion.

However, the IFP welcomes the allocations announced by the Minister, on Education, Health, and Social Development, as well as the prioritisation of the infrastructure catalytic projects, as this will increase our competitive advantage.

While we welcome the fact that the Minister has matched our expectations on the division of revenue allocated to local government, we question why only R30.7 billion goes to local government, when R74 billion will be allocated to provinces.

Once again, it is no secret that local government is the sphere of governance that most South Africans engage with daily; the role of local government has for far too long been understated by government.

Furthermore, we welcome the allocations made to the Department of Justice and Constitutional Development, and the additional R8.7 billion for the Police.

Hon. Inkosi Buthelezi: “Indeed, it is high time that our National Treasury stops the revision of our economic growth forecast – now at 4.8%, down from 5.1% last year – and starts sticking to a simple and clear number in double digits that will boost confidence in government’s ability to plan and make it happen. Setting targets as low as two percent is simply not good enough.

Overall, Minister Godongwana has a mammoth task at hand, and is trying to steer an already sinking ship. It appears that he is merely placing financial ‘plasters’ on the many wounds of this ship, as he tries to salvage a wreck. The division of revenue will simply carry us for a few more years, but if we do not stop to reflect, repair, and effectively build back a better vessel, we will tank this economy.”

The IFP has repeatedly submitted suggestions to government to get our country to work and to rebuild trust with the majority of South Africans.

Inkosi Mzamo Buthelezi, MP
IFP Deputy President and Spokesperson on Finance
072 390 6112

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