Research colloquium aims to put the Free State on a growth path
Following a two-year suspension due to the Covid-19 pandemic, the Free State Treasury sanctioned the 5th Free State Provincial Research Colloquium, which was held at the Central University of Technology (CUT) in Bloemfontein between 28–29 September 2022. It was keynoted by Free State MEC for Finance, Gadija Brown, with CUT’S acting Vice-chancellor, Professor Alfred Ngowi, making opening remarks and Emeritus Professor Estian Calitz from Stellenbosch University as well as senior economist Emile du Plessis delivering special addresses.
The colloquium took place on the backdrop of yet another flood in Jagersfontein, an iconic mining town in the Free State that recently made headlines when a burst dam wall caused floods that destroyed homes and public infrastructure. Upon announcing that Premier Sisi Ntombela couldn’t attend the colloquium as she was dealing with the reoccuring disaster, Brown implored delegates to think of solutions to Jagersfontein and related disaster areas.
“We are looking for some of you to come up with future solutions on those types of disasters and environmental issues… Part of governance is exactly what you are doing today; the better we plan, the better we execute,” she said, expanding that government was in need of research that looks at how to revive the local economies that were wiped out by the disaster, so that it didn’t only focus on rebuilding infrastructure.
The main objective of this year’s research colloquium, according to the political head of the Free State Treasury, was to facilitate the sharing of knowledge and to capacitate government on how to develop and implement effective policy tools to put the provincial economy on a fiscally sustainable growth path. The MEC added that succeeding in this objective would produce a climate that supported economic recovery, trimmed wasteful expenditure, improved governance and leveraged technology.
“I do anticipate and await rigorous engagements, ideas and support in shaping our policy decision-making, and the advancement of our province, that will in turn influence the preparation of our strategic documents over the medium-term budget policy statement as well as budget planning documents,” declared Brown.
The MEC was stern in calling for government departments and institutions to have a strong appetite for imwards plementation, saying long gone are the days where her department would table budgets without concrete improvement of the material conditions of the people.
Furthermore, she attributed the gap between budgets and service delivery to the lack of effective budget and project management, lamenting that many projects in the province often exceeded their budgeted timeframes with no sight of completion in the nearest financial years.
The Free State Treasury allocates a budget of R40bn, which MEC Brown said wasn’t making the intended impact. “How does that R40bn translate into seeing development, growth, infrastructure, new housing? How does that R40bn translate into better living conditions for our people?” she asked, before maintaining, “I don’t see it, I don’t feel it.”
The MEC acknowledged that the Free State had all the necessary technical knowledge to run a capable state and functional institutions, alluding to what CUT’S Prof Ngowi’s statement that his institution in collaboration with the University of the Free State and the Free State government started a repository to store critical research, ground-breaking knowledge and technology about the province.
However, Brown said most of this crucial literature was overlooked. Again, she lamented the poor maintenance of many capital expenditure projects, stating: “We find that in government we have major wins from a catalytic project perspective, but they’re largely white elephants because we don’t have a maintenance budget.”
MEC Brown told the colloquium that achieving prosperity in the Free State requires a balanced skills set instead of a focus on only highly skilled people. On the energy front, she problematised SA’S reliance on coal and said that “at a personal level” she was “comfortable with the energy mix”.
The colloquium also heard it was vital to package municipalities in a manner that attracted investment, which needed a reimagination of municipalities away from only rendering services to also developing the local economy.
Panel discussions tackle public wage bill, unemployment
Speaking on the first day of the colloquium, guest speaker, Prof Estian Calitz, set the debate in motion when he argued that government had to puncture its ballooning public wage bill and redirect the resources to other pressing needs. Prof Calitz’s gently delivered yet thought-provoking presentation was followed by a panel discussion that included representatives from the private sector and government. Although there was consensus among the panellists that SA’S public wage bill had to be significantly reduced, some members of the audience contended that reducing the wage bill shouldn’t be an excuse for retrenching workers. They also cautioned against singling out lower-level workers for the cuts.
Out of the Free State’s R40bn budget, a whopping R25bn is swallowed by the province’s wage bill.
In addition to the bloated wage bill, another topic deliberated was the high rate of unemployment in South Africa in general and the Free State in particular. Dr Oyeyinka Omosho-jones from the Economic Analysis Directorate in the Free State Provincial Treasury indicated that high unemployment rates and low economic growth, which he said have been persistent since 1994, posed a huge challenge for national government and policymakers.
“Our growth rate has not been that we can call productive growth, to reduce unemployment. The South African government has introduced six prominent policies since the year 1994, from Reconstruction and Development Plan to the National Development Plan, and none of them have worked,” asserted Dr Omoshoro-jones, adding that young people are the future and having millions of them unemployed was a ticking
time bomb.
“The inability of an increase in economic activity to reduce unemployment at provincial and national level creates a conundrum to policymakers on how to formulate and implement an effective pro-growth macroeconomic policy, determine optimal growth rate required to lower unemployment rate and also to achieve a sustainable and inclusive growth,” he elaborated.
According to Dr Marvellous Ngundu from the University of Kwazulu-natal, whose paper zoomed into the relationship between youth unemployment and educational attainment in South Africa, improved access to quality education increased young people’s chances of being employed. “As most youths get more educated, they become more competitive in the labour market,” he stated, noting that: “In as much as educational attainment is increasing, it is biased to
Hows does that R40bn translate into better living conditions? I don’t see it
Having millions of young people unemployed is a ticking time bomb
the upper secondary education.”
So, to mitigate the crisis of youth unemployment, government has to increase its funding support for students while ensuring high-quality and relevant content. “The absorption capacity of tertiary education graduates is still high. Youth population which is not employed but have tertiary education is less than 10%,” Ngundu emphasised, expanding that current research showed that young South Africans with upper secondary education are over twice as likely to not be employed or trained in marketable skills in comparison with their tertiary educated counterparts.
Director of Provincial Budget Analysis at the National Treasury, Ms A Xaba, contributed that even though the department of basic education accounted for a chunk of the national budget, the standard of education in public schools didn’t match the investment. She said the country needed effective teaching and learning tools and teachers if it were to win the war on unemployment.
The final day of the colloquium included a panel discussion featuring Free State Finance MEC Gadija Brown, Director-general in the Office of the Premier, Kopung Ralikontsane and Professor Tyna Van Niekerk who heads CUT’S Department of Government Management to discuss ways of narrowing the gap between policy and implementation. CUT’S Prof Ngowi also presented on the application of 4IR technologies to build a thriving and competitive provincial economy.