“For the first time in 17 years, debt will stabilise and it will continue to fall in the coming years. The budget deficit has narrowed significantly and debt-service costs are also falling.
“The world has taken notice: SA has been removed from the FATF grey list; we secured our first credit rating upgrade in 16 years and borrowing costs have eased, creating space for growth and development.
“These are signals of restored credibility. Of renewed resilience. And of a nation regaining its footing.“
Finance minister Enoch Godongwana delivered his budget speech to a great reception from much of SA.
He highlighted these world-recognised improvements which we achieved over a relatively short time.
These achievements testify to what our country can achieve when there is sufficient political will.
This time, that political will was just enough to avoid the total collapse of our economy.
The formation of the GNU also contributed, pushing the ANC away from the ideological approach to a more pragmatic approach.
The level of maturity demonstrated in the GNU is a credit to the ANC and, of course, its partners in government.
Coming from a very polarised political and economic history, the formation of the GNU was a decisive step forward.
It was a step towards the normalisation of our society, a noble objective that was sought by the earliest of our liberation struggle heroes.
Godongwana extracted a powerful lesson for SA from these improvements.
I hope this lesson is not merely a lesson learnt by the National Treasury, but by our entire political class.
This lesson is that “steady structural reform and responsible finances are the bedrock of a prosperous and more inclusive SA”.
In this sense, the word steady refers to the medium- to long-term nature of structural reform.
“Responsible finances” refers to finances that do not succumb to the short-term and impulsive allocation of public resources.
On the contrary, political populism requires short termism and the impulsive administration of public finances, something which aligns more with political expediency than national development.
It requires the use of public resources to secure political power and personal benefit within the incumbent political class.
Inevitably, this leads to political, economic and social stagnation.
Unfortunately, most of our budget speeches, even the best of them, do not make enough connection between great national financial performance and stellar economic performance.
They fail even further to make a clear connection between stellar economic performance and social wellbeing.
The budget speech attends to these areas of national life rather separately.
Though financial performance and economic performance are often better connected, the connection does not extend well enough to social wellbeing.
Instead, like Godongwana did, social wellbeing is allocated to social grants and the promise of jobs.
The problem is that SA’s political class is obsessed with poverty albeit in their said attempt to eliminate it.
This obsession tends to trap the entire political class into a downward gaze towards the “poor”.
One result is that the budget splits the country into two, speaking to the financially literate class with figures and statistics, and to the poor with rhetoric and vague promises.
This results in a massive waste of talent, which sees “poor people” as beneficiaries instead of firm participants whose participation is a boon for the economy.
Our shallow understanding of inclusivity fails to recognise that this approach wastes human resources and the latent talents which lie undeveloped in our people.
For instance, the minister’s identified pillars are to maintain macroeconomic stability, implement structural reforms, invest in growth-enhancing infrastructure and build state capacity.
However, nothing in these pillars explicitly indicates a structural shift in how ordinary people will be developed.
Don’t get me wrong, the minister did refer to efforts to reorganise training into a dual skills training system partly to improve the SETA system.
For this, he appealed to capable institutions to train jobseekers and graduates in artisanal skills.
This sounds great, but there is not nearly enough depth.
It seems like a peripheral effort that fails to recognise how central industry-related skills are in the development of our economy.
We have experienced a growing economy driven by large companies before.
While economic growth figures improved, a lot of our people were left at the periphery.
For this to change, the skills effort must be at the centre of our structural reforms.
This should not be something that still needs to be considered.
The lack of urgency in this type of investment delays significant returns for our economy.
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