Budget has set SA on path to rapid growth, says Cyril Ramaphosa

President Cyril Ramaphosa is convinced the national budget finance minister Enoch Godongwana tabled last week will achieve rapid and inclusive economic growth while supporting the nation’s developmental goals.

The president said that over the past five years his government had done several things to get the economy back on track.

“We have implemented far-reaching reforms in the energy, logistics, water and telecommunications sectors to address the binding constraints on growth.

“We have created a stable macroeconomic environment to encourage investment. We have expanded public employment and social protection to create jobs and provide an income for those who are unemployed.”

In his weekly newsletter, the president detailed how the budget takes the country further along the path of reviving the economy and rebuilding state institutions in at least three important ways. 

“First, the 2024 budget shows we are staying the course in our commitment to achieve a sustainable fiscal trajectory.

“Over the past 15 years, our debt burden has grown to a point where we are spending more on interest payments than we are on education or healthcare services. By reducing debt, we will create more space to spend on the things that matter — building our infrastructure, improving our schools and hospitals and making our communities safer.”

Ramaphosa said the less the state borrowed the more could be invested in the economy, which would help to create a virtuous cycle of investment and growth in the years to come. 

“Second, the budget protects critical services and social spending, making sure government can deliver on its most important obligations to all South Africans. We have allocated additional funds for service delivery, which will help to pay the salaries of police officers, teachers, nurses and doctors.

“This year alone, we will spend more than R480bn on education, R272bn on health and R265bn on other services like water, housing and public transport. A further R7.4bn will go towards the presidential employment stimulus, which has already created more than 1.7-million opportunities for work and livelihoods over the past three years, ensuring key programmes like school assistants will continue.”

Ramaphosa said the government was also increasing social grants to help the poorest households cope with the rising cost of living.

He said additional money had been allocated to the fight against corruption and state capture, following through on the commitment he made in the state of the nation address (Sona). 

“Third, the budget includes new measures to support growth and create jobs while rebuilding infrastructure. A new grant has been established to fund the rollout of smart meters in municipalities, which will help modernise our electricity system and reduce load-shedding.

“A generous incentive will be introduced to support the manufacturing of electric vehicles from 2026 onwards as part of our commitment to position SA as a leading player in the green economy.”

According to the president, innovative new funding instruments have been introduced for infrastructure projects, and the National Treasury has published revised regulations to make it easier to implement public-private partnerships.

“These measures will enable much greater investment in infrastructure. Our economy has been weighed down by more than a decade of low growth and rising debt, made worse during the state capture era as confidence was eroded.”

Ramaphosa said that during the course of this administration, they have worked hard to change this and build a foundation for higher growth and more jobs.

“The 2024 budget shows we are heading in the right direction. We are determined to continue on this path, following through on economic reforms, getting our public finances in shape and protecting basic services for the poor. Working together we will ensure better years lie ahead.”

TimesLIVE