African National Congress Parliamentary Caucus welcomes 2020 Medium Term Budget Policy Statement (MTBPS)

28 October 2020

The African National Congress (ANC) Parliamentary Caucus welcomes the 2020 Medium Term Budget Policy Statement (MTBPS), delivered by the Minister of Finance, Comrade Tito Mboweni, in the National Assembly today.

We are acutely aware that the Minister has tabled the MTBPS within a severely constrained fiscal space, with a budget deficit projected to reach 14.6 percent and debt at 95 percent of GDP in the next five years. Coupled with this, the economy has contracted by 7.8 percent and 2.2 million workers lost their jobs in the second quarter of 2020.

This year’s MTBPS is also delivered amidst the global coronavirus pandemic that has had a devastating impact on the global economy.

The ANC Caucus appreciates the difficult choices faced by government in responding to this unprecedented crisis. The people of South Africa have been inspired by the astute leadership provided by the ANC government, led by President Cyril Ramaphosa, during this period of uncertainty. We welcome the focus on the reconstruction and recovery plan that was presented by the President to Parliament two weeks ago which is aimed at lifting the South African economy out of this quagmire. We are encouraged that the plan was a product of a social compact with the social partners in Nedlac. We believe that the 2020 MTBPS allocates funding for programmes aligned to the objectives of the plan.

Long before the COVID-19 pandemic hit South African shores, our economy was in drastic need of policy interventions to propel it back it to the path of growth, massive job creation and inclusion. The ANC is encouraged that government is focusing on implementing the necessary structural reforms to accelerate the growth, competitiveness, and inclusiveness of the South African economy.

The ANC Caucus is committed to fast-tracking the legislative processes through Parliament, which is necessary in realising the policy objectives set out in the MTBPS.

These objectives are in line with the ANC’s 2019 election manifesto commitments as well as the National Executive Committee’s (NEC) decisions to prioritise the building of infrastructure, expanding electricity generation, allocating digital spectrum, and supporting rapid industrialisation and employment creation. These measures will provide government with the necessary revenue to fund social support programmes that millions of our people need to ward off hunger and destitution.

The ANC supports government’s responsible interventions to manage the national debt and prevent South Africa from falling into a deeper debt trap.

We welcome the fact that the South African government has not imposed full-blown austerity measures that could cripple the prospects of recovery. The Caucus believes that increased investment in infrastructure, as research has proved, will provide higher fiscal multipliers than borrowing to fund consumption.

State-owned companies, particularly Eskom, must be turned around immediately to lower the costs to consumers and support industrialisation. We thus welcome the progress made in this regard as well as the commitment to procure additional 12 000 Megawatts of electricity from Independent Power Producers in the next two years.

The ANC Caucus also welcomes the infrastructure projects announced by the Minister, which include R20 billion in social housing over the next 10 years and R96 billion for student accommodation, amongst others. We also welcome the proposed amendment of regulation 28 of the Pension Funds Act, that will make it easier for retirement funds to invest in infrastructure projects.

We support Operation Vulindlela, which is a collaboration between the National Treasury and the Presidency, working with the Private Sector, to harness the project management skills needed to implement infrastructure projects successfully. We also support the implementation of the District Development Model. We believe that it will facilitate a more efficient management of programmes and resources amongst and between the three spheres of government for local economic development.

The ANC Caucus fully commits to supporting the fight against corruption, particularly in the procurement of public goods and services.

We welcome the extension of the Social Relief of Distress grant to the end of January 2021. This grant has provided much needed relief for our people, especially the vulnerable and needy. The allocation of R2.9 trillion (or 47 percent) of the national budget in the Medium Term to learning and culture, social development and health is evidence that the ANC government remains committed to the progressive orientation of its policies, even under difficult circumstances.

With regards to the Public Service Wage Bill, the ANC Caucus calls on government and the trade unions to find an amicable settlement in the interests of the reconstruction and recovery of the economy.

We also support the Government’s decision on the continued operation of SAA and the endeavours to fund the revival of SAA and not its liquidation, which is based on the fact that SAA is an agency of value added economic activity for the country. A restructured SAA operating efficiently and on commercial principles will also positively contribute to the economic recovery of the country. It is reassuring to know that the funding of SAA will not result in further debt as funding was raised through adjustment within the current budget. The SAA matter is not solely related to financial assistance from Government. There is a wider economic rationale for the funding of SAA as the national airline makes an important economic contribution to the country.

As the ANC, we reiterate that we fully support the extraordinary measures taken by government to drive South Africa towards a path of recovery. We remain committed to robustly play our oversight role to ensure governance and accountability.

Issued by the Office of the ANC Chief Whip, Comrade Pemmy Majodina


Nomfanelo Kota
Acting Caucus Spokesperson
067 415 1089