WHEN MEC for provincial planning and treasury Phumulo Masualle delivers the provincial budget policy statement in Bhisho today, Eastern Cape business and opposition parties will be looking for spending to stimulate economic growth, boost business and tackle public sector inefficiencies.
The province expects an equitable share of nearly R60-billion, the bulk of which would go to health and education which are plagued by perennial over-spending.
The MEC will have to balance the needs of infrastructure development with stimulating economic growth.
He is expected to announce mechanisms to regulate spending in the health and education departments.
The placing of permanent teachers features strongly on the agenda of teacher union Cosatu while job losses in the Eastern Cape have stubbornly resisted the government’s own job creation efforts, with 69000 jobs lost in the last quarter of 2012 according to Statistics South Africa.
Business said some of the province’s job creation and economic growth challenges could be solved by stimulating small business.
Eastern Cape Development Corporation (ECDC) chief executive Sitembele Mase said the development institution hoped the budget would allocate finances to the tune of R481- million for the next three years, to help it achieve its viability model.
This would capitalise the company to the tune of R1-billion over the medium term expenditure framework (MTEF) up to the 2015-16 financial year.
Mase said the ECDC was working on a strategy to dispose off its non- performing assets including equity stakes in some of its subsidiaries and residential properties to make up R500-million and reach break-even point by 2016-17.
“We would like the government to invest in ECDC to the tune of R481- million over the next three years. In addition we must dispose of non- performing assets such as properties and equities which cause a financial drag and do not contribute to the business,” said Mase..
“This will help us raise R500-million so that we can have close to R1-billion by 2016. That will enable us to use our own assets to best develop the Eastern Cape.”
ECDC is the Eastern Cape’s main development finance institution and the lender of first resort for hundreds of small businesses.
It has only made a profit once in 2009 since its formation in 2001 and last year made a loss of R90-million.
Mase said the budget should focus on stimulating agriculture and agro- processing, infrastructure development, tourism and manufacturing.
Among others these were the pillars for the Eastern Cape’s economic growth.
COPE Eastern Cape MPL Sam Kwelita said the MEC should focus on reining in irregular spending at the departments of education and health which he said hampered the province’s social spending plans.
“We have these two departments which finish every year without enough resources and we expect the MEC to come up with solutions,” Kwelita said .
“In addition to those problems we still have mud schools and health infrastructure conditions are also not good. We expect the MEC to deal with those problems. “The SME sector is also not increasing at the expected rate so we expect the MEC to table a budget that will address the challenges of small businesses.”
This year’s budget comes at a time when the province faces the threat of a shrinking fiscus in line with the outward migration reported in the 2011 Census results released last year.
Public Service Accountability Monitor (PSAM) spokeswoman Yeukai Mukorombindo-Chiweshe said PSAM anticipated a decrease or a small increase in the province’s budget as a result of large volumes of outward migration to other provinces and a drop in provincial GDP growth this financial year.
“With a probable tight budget, the MEC should emphasise reprioritisation, improvements in spending capacity and a crackdown on fruitless/wasteful expenditure as well as financial mismanagement and corruption. Definitive measures to improve fiscal discipline and governance in all departments should be a feature.
“We would also like the MEC to address issues such as the perennial over-expenditure on personnel. In the current fiscal climate and with the need to address educator deployment across the province we expect the MEC to touch on the implications for allocations in the MTEF,” Mukorombindo-Chiweshe said. —
EC provincial budget faces tough task to cover demands
The province expects an equitable share of nearly R60-billion, the bulk of which would go to health and education which are plagued by perennial over-spending.
The MEC will have to balance the needs of infrastructure development with stimulating economic growth.
He is expected to announce mechanisms to regulate spending in the health and education departments.
The placing of permanent teachers features strongly on the agenda of teacher union Cosatu while job losses in the Eastern Cape have stubbornly resisted the government’s own job creation efforts, with 69000 jobs lost in the last quarter of 2012 according to Statistics South Africa.
Business said some of the province’s job creation and economic growth challenges could be solved by stimulating small business.
Eastern Cape Development Corporation (ECDC) chief executive Sitembele Mase said the development institution hoped the budget would allocate finances to the tune of R481- million for the next three years, to help it achieve its viability model.
This would capitalise the company to the tune of R1-billion over the medium term expenditure framework (MTEF) up to the 2015-16 financial year.
Mase said the ECDC was working on a strategy to dispose off its non- performing assets including equity stakes in some of its subsidiaries and residential properties to make up R500-million and reach break-even point by 2016-17.
“We would like the government to invest in ECDC to the tune of R481- million over the next three years. In addition we must dispose of non- performing assets such as properties and equities which cause a financial drag and do not contribute to the business,” said Mase..
“This will help us raise R500-million so that we can have close to R1-billion by 2016. That will enable us to use our own assets to best develop the Eastern Cape.”
ECDC is the Eastern Cape’s main development finance institution and the lender of first resort for hundreds of small businesses.
It has only made a profit once in 2009 since its formation in 2001 and last year made a loss of R90-million.
Mase said the budget should focus on stimulating agriculture and agro- processing, infrastructure development, tourism and manufacturing.
Among others these were the pillars for the Eastern Cape’s economic growth.
COPE Eastern Cape MPL Sam Kwelita said the MEC should focus on reining in irregular spending at the departments of education and health which he said hampered the province’s social spending plans.
“We have these two departments which finish every year without enough resources and we expect the MEC to come up with solutions,” Kwelita said .
“In addition to those problems we still have mud schools and health infrastructure conditions are also not good. We expect the MEC to deal with those problems. “The SME sector is also not increasing at the expected rate so we expect the MEC to table a budget that will address the challenges of small businesses.”
This year’s budget comes at a time when the province faces the threat of a shrinking fiscus in line with the outward migration reported in the 2011 Census results released last year.
Public Service Accountability Monitor (PSAM) spokeswoman Yeukai Mukorombindo-Chiweshe said PSAM anticipated a decrease or a small increase in the province’s budget as a result of large volumes of outward migration to other provinces and a drop in provincial GDP growth this financial year.
“With a probable tight budget, the MEC should emphasise reprioritisation, improvements in spending capacity and a crackdown on fruitless/wasteful expenditure as well as financial mismanagement and corruption. Definitive measures to improve fiscal discipline and governance in all departments should be a feature.
“We would also like the MEC to address issues such as the perennial over-expenditure on personnel. In the current fiscal climate and with the need to address educator deployment across the province we expect the MEC to touch on the implications for allocations in the MTEF,” Mukorombindo-Chiweshe said. —
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos