Finance Minister Enoch Godongwana delivers the National Budget Speech at the Good Hope Chamber on 23 February 2022 in Cape Town, South Africa. (Photo by Gallo Images/Jeffrey Abrahams)
High spending equals a deteriorating state, now that does not make sense. If anything, it is supposed to be the direct opposite. High government spending is supposed to reflect as improvement in people’s lives, such as people getting employed, people starting and growing businesses, youth employability and education improving, infrastructure getting built and maintained, more and more people getting out of poverty. With South Africa’s level of spending things should be getting better, but no! they are getting worse including our debt.
South Africa faces huge challenges, although not new, just worse in recent times. From high youth unemployment, collapsing infrastructure, our man-made energy crisis and a poor education system. Yet when you take a look at the amount of funds allocated in the budget from 2018 up to now, it shows that the state just likes dumping money at these problems.
In the financial year 2020/21 government spending breached R2 trillion resulting in the exact expenditure of R2.1 trillion, this was up from R1.97 trillion the previous financial year 2019/20 and from the previous financial year (2018/2019), it was 10% less according to statssa.
Most of government spending goes towards education, general public services, social protection, health and economic affairs. In the financial year 2019/20 government spent R469 billion on general public services of which 10% (R205 billion) went towards interest payments on public debt. In the financial year 2020/21 R507 billion was spent on general public service of which 11% (R233 billion) went to interest payments.
As of 2021/22 the Republic has a gross loan debt of R4.3 trillion according to News24. When delivering his 2023 budget speech in February, Minister of Finance Enoch Godongwana said government’s debt is estimated to increase from R4.7 trillion in 2022/23 to R5.84 trillion in 2025/26. Those figures include the R254 billion partial debt relief for Eskom. As a result, it is expected that South Africa will spend R340.5 billion servicing its debt for the 2023/24 financial year, this is according to the 2023 budget speech.
Spending related to Youth and Service delivery.
Based on the 2023 budget speech, Government consolidated spending will be R2.24 trillion for the 2023/24 financial year, R1.35 trillion will be spent on social services of which the majority of it will be spent of learning and culture, which will be allocated an amount of R457.1 billion. Basic education will receive R293 billion while NAFAS is allocated R50.1 billion.
For years education, particularly basic education has been allocated a big chunk of the budget, this time its no different, the problem is these allocations are not making the education system more efficient and capable. South Africa spends more money on education than some of its African counterparts, and some of them perform better with their significant less spending on education.
Kate Wilkinson, a deputy editor at Africa check stated that “In 2007 South Africa was spending US$1,225 on primary education per pupil – more than most African countries”. Kenya spends only US$258 on primary education per pupil but performs better than South Africa in both reading and mathematics she stated. She further mentioned that Zimbabwe’s education system is better than that of South Africa, as far as literacy and numeracy are concerned. Although her article is old it still helps put things into context now.
Unemployment stood at 32.7% in the fourth quarter of 2022. The expanded definition of unemployment, which includes those discouraged from seeking work was 42.6% in the fourth quarter. The youth unemployment rate, measuring job-seekers between 15 and 24 years old, rose to 61% in the fourth quarter of 2022, up from an over two-year low of 59.6% in the previous period according to statistics South Africa.
Godongwana’s budget speech failed to extensively address this matter, he mentioned R24.6 billion that has been allocated to job creation and labour. The amount shows government’s mismatched spending that does little to affect real change. In 2021 the government allocated R33.4 billion towards job creation and labour affairs, in 2022 that amount dropped drastically to R27.8 billion.
There should be correlation between government spending and improvement in economic and social affairs, this would also be an indication of an efficient, effective and capable state, at the moment that is not the case. Perhaps the reconfiguration of government by treasury as mentioned by President Cyril Ramaphosa during his SONA, will lead to that corelation.
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