The Gauteng Adjustment Budget announced by the MEC for Finance, Lebogang Maile, yesterday paints a picture of a province under immense financial pressure.
The MEC indicated that the province received less funding from the National Treasury (NT), which has an impact on social services and government programmes.
A shocking 27% of Gauteng residents live below the poverty line. In addition to that, the unemployment rate among young people is a staggering 40%.
Although the ANC minority government tries to blame external events, such as colonialism, imperialism, neoliberalism, the 2008 economic recession and the Covid-19 pandemic, for the poor economy, the truth is that the Gauteng economy’s Achilles heel is the ANC itself.
The MEC ironically began his speech by referring to the film “Troy”, based on Greek mythology, which poses the question of whether one’s actions will echo throughout eternity.
What the MEC tried to convey is that the ANC minority government’s reaction to these external events was appropriate, and that it is subsequently implementing the best policies and legislation in response to it.
Maile is conveniently forgetting about the ANC’s serious shortcomings and the role it played in bringing about Gauteng’s failed economy, which is the province’s actual Achilles heel.
During the years of ANC rule in the province since 1994, local and foreign investments gradually declined and healthy economic activities followed suit.
The reduction in funding from the NT shows that one cannot depend on the state and the fiscus to establish a government that can take care of everyone from the cradle to the grave.
The fact that the provincial government generates only 5% of its own revenue points to the internal limitations faced by the provincial government.
On top of that, the provincial government has to settle additional debt as the NT transferred 30% of the e-toll debt to Gauteng.
Seeing as it was the national government and Sanral that launched the e-toll project, the national government should have remained responsible for settling the debt and the Premier, Panyaza Lesufi, made a grave mistake in letting the province take on any of the debt.
The only proven solution available to the provincial government is creating an environment conducive to local and foreign investments in the province.
There is indeed a lot of potential for such investments, but then national government will have to ease labour and black empowerment requirements, and both the national and Gauteng government will have to seriously tackle corruption.
Many international companies are eager to invest, but are waiting for the ANC minority government to show positive signs of deregulation and law enforcement.
Gauteng’s projected economic growth for 2024 appears to be no more than a mere 1%, while growth of between 5% and 6% is needed to facilitate job creation which will drastically reduce the unemployment rate. So, substantial investments are needed to act as a catalyst for economic activities.
The FF Plus plans to make these types of investments possible and is currently engaging with the Gauteng government to find ways to create a more favourable environment for investors.
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