During his Budget Speech yesterday, Mr Godongwana described infrastructure as the foundation of inclusive and sustainable growth, thus the public sector is projected to spend R903 billion on infrastructure over the medium-term. The largest portion of this, around R448 billion, will be spent by state-owned entities and through public-private partnerships.
This spending will mostly occur for strategic projects in transport and logistics, where an estimated R351.1 billion will be spent. This will allow the South African National Road Agency to improve the road infrastructure network. In addition, R132.5 billion is planned to be spent over the next three years on water and sanitation, mainly by the water boards.
Mr Godongwana said the government needs to crack down on criminality in the construction sector. The extortion and intimidation of lawfully appointed contractors and the workers they employ cannot be tolerated, he pointed out.
Minister Godongwana also announced a budget allocation in response to the recent floods and the national disaster declared in various provinces. He said R695 million is available in this financial year for immediate relief and a further R1 billion will be available next year.
He called on provinces and municipalities to reprioritise existing allocations to cater for the immediate needs of affected communities, such as temporary shelter and social assistance. The contingency reserve will also be used to fund emergency responses, including as undertaken by the defence force.
Mr Godongwana told Members of the NA that the increased allocations for all three spheres of government are included in the Budget, to assist with urgent spending pressures. Relative to the 2022 Budget, direct provincial allocations increase by R92.7 billion, to R2.17 trillion over the medium term.
This increase consists of R76.9 billion added to the provincial equitable share and R15.8 billion added to direct conditional grants. Local government allocations will increase by a total of R14.3 billion, made up of R8.1 billion in the local government equitable share and R6.2 billion in direct conditional grants. This takes the total direct allocation to R522 billion over the same period. He said these allocations alleviate some of the financial pressures, particularly in health, education and free basic services where the costs of providing services are rising.
Mr Godongwana also said that the South African economy is facing significant risks and that uncertainty is on the rise. He called on the government to do bold things. “… to put the fear of failure aside and execute the difficult trade-offs needed to get from where we are now, to where we want to be in the future.”
Mava Lukani
23 February 2023
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