In his medium-term budget policy statement finance minister Malusi Gigaba was mindful of reiterating government’s commitment to critical issues such as inclusive growth and job creation. But he kicked the can down the road when it came to articulating decisive actions.
No-one, not even the investment community, can fault SA on devising and articulating credible plans for economic growth.
But now it’s time to win this community’s trust by walking the walk.
When it comes to some of the numbers that contribute to our fiscal diagnosis, there is legitimate reason for concern. And we need look no further than the gross debt-to-GDP ratio.
Our debt exceeds 50% of GDP and is expected to climb above a staggering 60% by 2021 in the absence of additional fiscal measures.
Then there are the glaring leeches in our economy that escaped, unbelievably, any form of reprimand (or even a mention) in the minister’s speech, such as government departments that spend wastefully and unnecessarily, and the scourge of corruption. Disappointing.
Critical levers for growth, such as education, also warrant a decisive plan. Government has earmarked approximately R243bn of total consolidated spending for basic education during the 2016/2017 fiscal year, yet our standard of education continues to be an Achilles heel, and joblessness just keeps climbing.
Our only hope lies in demonstrating accountability through meaningful actions and a credible plan. If sustained, this will start to build the critical confidence that SA needs to mitigate our corrosive trust deficit.
As Gigaba reflected in his speech, "we desperately need business that invests". I can think of no better place to start than in renewable energy, if only government would create some policy certainty about nuclear.
SA could fill a tome with the number of plans government has devised, yet our deficit — fiscal and in terms of trust — remains. It’s now time to demonstrate accountability and rebuild trust.
CEO: IQ Business, Johannesburg