More money for Health, Social Welfare, Provinces and Municipalities

According to Minister Tito Mboweni, the 2021/22 Division of Revenue stands as follows: 48.7% of nationally raised funds are allocated to the national government, 41.9% to provinces, and 9.4% to local government, writes Mava Lukani.

Global economic growth is expected to rebound to 5.5% in 2021 before moderating slightly to 4.2% in 2022, spurred on by the expected rollout of Covid-19 vaccines and other additional policy initiatives. China is expected to grow at 8.1% in 2021, while India will achieve a growth rate of 11.5% in 2021. Sub-Saharan Africa is forecast to grow by 3.2%. In this context, Mr Mboweni said the South African economy is expected to rebound by 3.3% this year, following a 7.2% contraction in 2020, and average 1.9% in the outer two years.

The Minister is also hopeful because the government is making meaningful progress in the implementation of structural economic reforms. South Africa’s structural weaknesses limit the rate at which our economy can grow. “Our structural reform agenda, as articulated in the Economic Reconstruction and Recovery Plan, is aimed at removing these brakes on growth,” he emphasised.

On Operation Vulindlela, which the Minister introduced last year, he said it has already made demonstrable progress in accelerating the pace of implementation of highimpact structural reforms. Much of that progress was outlined in the 2021 State of the Nation Address. Mr Mboweni thanked his Cabinet colleagues for their support of Operation Vulindlela and assured Members of the Cabinet that Deputy Minister, Dr David Masondo and the team from the Presidency and National Treasury remain hard at work together with the relevant departments to ensure that the implementation of the remaining reforms is appropriately funded and accelerated.

“We will not rest until we have fundamentally altered the structure of this economy by lowering barriers to entry, broadening ownership patterns, raising productivity and lowering the cost of doing business,” he emphasised.

“We face many challenges as a developing country. We are confronting these head-on. Our country has a network of highways and byways which are the envy of many countries. The mighty N1 from Cape Town to Beitbridge, the scenic R71 that meanders through the misty mountains of Makgoebaskloof and delivers us to the Kruger National Park, and the expansive N4 that stretches from Botswana across our country into Mozambique.

He said all these are part of the lifeblood of the regional economy. “Our great dams, bridges and railway lines have supported our economy for decades. However, much of this infrastructure now needs repair or replacement.”

He told the NA that the government has committed itself to a R791.2 billion infrastructure investment drive to this end. “We are already partnering with the private sector and other players to roll out infrastructure through initiatives such as the blended finance infrastructure fund,” he added.

This is after providing for debt-service costs, the contingency reserve and provisional allocations. The provincial equitable share will be augmented by R8 billion for provincial health departments in 2021/22 to deal with Covid-19. Of the R10.3 billion for vaccines, R2.4 billion is allocated to provincial departments of health to administer the Covid-19 vaccine programme.

The equitable share for the local government sphere is set to increase to 9.7% of the Division of Revenue in 2023/24. “We are aware that financial governance remains a challenge for many municipalities. Therefore, the Municipal Systems Improvement Grant is extended for the rollout of the District Development Model,” the Minister added.