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Tourism opens request for proposals for Tourism Equity Fund (TEF)
Request for proposals for the Tourism Equity Fund opens.
The Department of Tourism together with the Small Enterprise Finance Agency (sefa), an agency within the Department of Small Business Development (DSBD) is pleased to announce the opening of the application process for the Tourism Equity Fund (TEF) starting from Monday 6 November 2023.
Following the Cabinet's approval in September 2023 for the revised TEF to be implemented, we are delighted to announce that the Request for Proposals for funding from the TEF is now open to businesses.
The R1.2 billion TEF aims to increase growth, and transformation and stimulate more inclusive participation in the tourism sector in line with the targets of the Tourism B-BBEE Sector Codes. The TEF is intended to address the funding challenges faced by Qualifying Small Enterprises and Emerging Micro Enterprises in the tourism sector.
The TEF will be implemented by:
- Assessing and scoring applications against jobs to be sustained and/or jobs to be created, location and geographic spread, and targeted groups (youth, women, and people with disabilities).
- Department of Tourism and sefa in partnership with banking and/or financial institutions in the Republic of South Africa, which includes, amongst others, banks and developmental finance institutions that will offer affordable and tailor-made financial solutions, in an attempt to close funding gaps in the market, through the provision of a blended finance solution.
- Disbursing a total of 80% of the TEF funds to existing Small Medium and Micro Enterprises in the market to enable these businesses to grow. The remaining allocation of 20% of the funds will be disbursed to new businesses.
sefa will implement, execute, and manage the Fund through a Fund Management Agreement signed with the Department of Tourism. The Department will support and monitor the implementation of the TEF on a monthly basis.
The TEF places significant emphasis on providing support to tourism enterprises that meet the qualifying criteria, including a minimum of 30% Black ownership either before or after the financial support. The TEF is exclusively dedicated to investing in various sub-sectors within the tourism industry as prescribed in the Tourism B-BBEE Sector Codes.
The Department of Tourism is committed to enhancing transformation in the tourism sector, and the TEF aims to contribute towards achieving transformation goals in this important sector of our economy.
“The funding structure comprises grant funding, and debt financing, to meet the distinct needs of tourism enterprises that are either seeking equity acquisition, investment in new developments, or expansion of their existing businesses,” Minister de Lille said.
The TEF is backed by formidable public-private partnerships, which support the participation of private, commercial, and non-commercial banks, and various developmental funding institutions.
“The collaboration between public and private entities serves as a notable example of successful cooperation in advancing a more inclusive and prosperous tourism sector,” Minister de Lille added.
Minister de Lille concluded: “As stated before. the Department of Tourism remains committed to advancing the transformation agenda through creating equitable opportunities to realise an inclusive and revived tourism economy.”
With consideration of Regulation Gazette No 11067, Volume 697, No 49018 published on 25 July 2023, withdrawing Regulation Gazette No 11241, Volume 668 of 19 February 2021. No 44172, all applicants (including previous applicants) are encouraged to submit new applications that will align with the new qualifying criteria of TEF.
For more information on the Tourism Equity Fund and the application process, please visit the Department of Tourism's website: https://apo-opa.info/3QIzYSG
Distributed by APO Group on behalf of Department of Small Business Development, Republic of South Africa.
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Tourism announces opening of application process for TEF
Tourism announces opening of application process for TEF
The Department of Tourism, together with the Small Enterprise Finance Agency (Sefa) - an agency within the Department of Small Business Development, has announced the opening of the application process for the Tourism Equity Fund (TEF) on Monday, 06 November 2023.
“Following Cabinet’s approval in September 2023 for the revised TEF to be implemented, we are delighted to announce that the Request for Proposals for funding from the TEF is now open to businesses,” the Department of Tourism said in a statement.
The R1.2 billion TEF aims to increase growth and transformation, and stimulate more inclusive participation in the tourism sector in line with the targets of the Tourism B-BBEE Sector Codes.
The TEF is intended to address the funding challenges faced by Qualifying Small Enterprises and Emerging Micro Enterprises in the tourism sector.
The TEF will be implemented by:
- Assessing and scoring applications against jobs to be sustained and/or jobs to be created, location and geographic spread, and targeted groups (youth, women, and people with disabilities).
- Department of Tourism and Sefa in partnership with banking and/or financial institutions in the Republic of South Africa, which includes, amongst others, banks and developmental finance institutions that will offer affordable and tailor-made financial solutions, in an attempt to close funding gaps in the market, through the provision of a blended finance solution.
- Disbursing a total of 80% of the TEF funds to existing Small Medium and Micro Enterprises in the market to enable these businesses to grow. The remaining allocation of 20% of the funds will be disbursed to new businesses.
“Sefa will implement, execute and manage the Fund through a Fund Management Agreement signed with the Department of Tourism. The Department will support and monitor the implementation of the TEF on a monthly basis,” the department said.
The TEF places significant emphasis on providing support to tourism enterprises that meet the qualifying criteria, including a minimum of 30% Black ownership either before or after the financial support.
The TEF is exclusively dedicated to investing in various sub-sectors within the tourism industry as prescribed in the Tourism B-BBEE Sector Codes.
The department said it is committed to enhancing transformation in the tourism sector and the TEF aims to contribute towards achieving transformation goals in this important sector of the economy.
“The funding structure comprises grant funding, and debt financing, to meet the distinct needs of tourism enterprises that are either seeking equity acquisition, investment in new developments, or expansion of their existing businesses,” Tourism Minister Patricia de Lille said.
The TEF is backed by public-private partnerships which support the participation of private, commercial, and non-commercial banks, and various developmental funding institutions.
“The collaboration between public and private entities serves as a notable example of successful cooperation in advancing a more inclusive and prosperous tourism sector.
“The Department of Tourism remains committed to advancing the transformation agenda through creating equitable opportunities to realise an inclusive and revived tourism economy,” de Lille said.
With consideration of Regulation Gazette No 11067, Volume 697, No 49018 published on 25 July 2023, withdrawing Regulation Gazette No 11241, Volume 668 of 19 February 2021. No 44172, all applicants (including previous applicants) are encouraged to submit new applications that will align with the new qualifying criteria of TEF.
For more information on the Tourism Equity Fund and the application process visit: https://www.tourism.gov.za/CurrentProjects/Tourism_Equity_Fund/Pages/Tourism_Equity_Fund.aspx - SAnews.gov.za
Edwin
Thu, 11/02/2023 - 11:55
45 views
Measures in space to ensure safe and secure AGOA
Measures in place to ensure safe and secure AGOA
The National Joint Operational and Intelligence Structure (NatJOINTS) has put measures in place to ensure the 20th African Growth and Opportunity Act (AGOA) Forum takes place in a safe and secure environment.
NatJOINTS includes various government departments led by the South African Police Service (SAPS), South African National Defence Force (SANDF) and the State Security Agency (SSA).
Police spokesperson, Brigadier Athlenda Mathe, said a safety and security operational plan is already being enforced, with all critical role players already on the ground to execute their various responsibilities, as per their mandate.
Mathe said police visibility has been heightened in and around the Johannesburg Expo Centre, with the aim of preventing and combating any form of opportunistic crime, before, during and post the event.
She emphasised that only those in possession of accreditation to attend will be allowed near the venue and restricted areas.
“Those found with fraudulent accreditation will face the full might of the law. Lost cards must be immediately reported to the South African Police Service. It is a serious offence to exchange cards amongst colleagues.
“Residents of Johannesburg and those who are operating businesses within the vicinity of the Johannesburg Expo Centre are advised about road closures for the duration of the event,” Mathe explained.
The affected intersections in the Nasrec precinct as reported by Johannesburg Metropolitan Police Department (JMPD) include:
• Nasrec Road and Recreation Road;
• Nasrec Road and Randshow Road;
• Randshow Road and Commerce Street;
• Nasrec Road and Landbou Road;
• Golden Highway Road and Randshow Road;
• Ring 1 and Ring 2;
• Golden Highway and Stadium Road and
• Nasrec Road and Stadium Road.
NATJOINTS assured all dignitaries, attendees and spectators that multidisciplinary and integrated teams are already on the ground and are ready to deliver a safe and secure event. – SAnews.gov.za
GabiK
Thu, 11/02/2023 - 09:49
153 views
Gloom ahead as government treads water ahead of an election
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AGOA Trade and Economic Cooperation Forum
AGOA Trade and Economic Cooperation Forum
By Michael Currin
Growing business, trade and investment ties between sub-Saharan African nations that are part of the Africa Growth and Opportunity Act and the United States (US) holds enormous benefits for the two regions.
Last year the combined two-way trade between AGOA beneficiaries and the United States exceeded $46 billion and there is strong potential for further growth as trade and investment is deepened.
These trade and investment opportunities will be explored at the 2023 AGOA Trade and Economic Cooperation Forum, which is being hosted by South Africa at the Johannesburg Expo Centre from 2-4 November 2023.
The forum, attended by a senior delegation from the United States and 35 Sub-Saharan Africa Trade Ministers, will seek to strengthen trade and investment. Moreover, with African Regional Economic Communities, civil society, organised and business representatives in attendance, it also encourages regional integration.
There is ample room for growth between the US and Africa, particularly in the critical mineral value chain which is at the centre of the global clean energy transition. The continent is a major producer of cobalt, copper, bauxite, chromium, high purity iron ore, platinum group metals and lithium which is needed for the global energy transition.
Those who partner with the continent will have access to these critical resources to spur on and benefit from the clean energy revolution. The International Energy Agency’s World Energy Outlook 2022 foresees demand for these critical minerals more than doubling by 2030 and quadrupling by 2050.
The forum also reaffirms Africa as a capable economic partner and a lucrative destination for growth and investment. Sub-Saharan African economies are on the rise following the impact of COVD-19 with the International Monetary Fund's Regional Economic Outlook forecasting their growth by 4.2 per cent in 2024 from 3,6 per cent in 2023.
Alongside the forum will be the Made in Africa exhibition that will display the products of more than 500 companies from across Sub-Saharan Africa. It will exhibit the region’s agricultural, automotive, chemicals, metals and minerals, mining and machinery, clothing and textiles, leather and footwear and the boatbuilding sector products.
Significantly, this forum is the last engagement hosted in Sub-Saharan African before the expiry of the current iteration of the African Growth and Opportunity Act in June 2025. AGOA has been at the core of United States economic policy and commercial engagement with Africa.
It was signed into law on 18 May 2000 to provide duty-free exports of goods from 40 sub-Saharan African countries to the United States, giving them a competitive advantage in the lucrative US market.
There are over 5240 tariff items that qualify for the AGOA ranging from apparel and footwear, wine, certain motor vehicle components, a variety of agricultural products, chemicals as well as steel.
The 2023 AGOA Trade and Economic Cooperation Forum is an opportunity to lobby for the renewal of AGOA beyond 2025 as a mutually beneficial platform for global exchange and growth for the industries involved, and as a gateway to the vibrant African market. An extension of AGOA will promote inward investment in Africa and deepen the impact of industrialisation on the continent.
Furthermore, it will also support our efforts to increase trade through the African Continental Free Trade Area (AfCFTA) that covers 54 countries and 1.4 billion people. It is anticipated that Africa’s trade will be greatly boosted by AfCFTA and the US stands to gain access to a single market, which is projected to grow to 1.7 billion people and $6.7 trillion in consumer and business spending by 2030.
The trade relationship between the US and South Africa has greatly benefitted from the AGOA agreement.
South Africa remains a key source of raw materials for the American economy and has become one of the region’s top 3 exporters to the US. The most success has been in our automobile sector which is the country’s biggest single beneficiary of the programme. Our local citrus industry has also benefited with the Western Cape exporting approximately R1.6 billion worth of citrus to the US under AGOA in 2022.
Other leading exports to the US included iron and steel, edible fruits, organic chemicals and precious stones. It helped create a total of 62 395 direct and indirect jobs, while overall AGOA generated an estimated 350 000 direct and 1.3-million indirect jobs in Sub-Saharan Africa.
South Africa looks forward to welcoming stakeholders from the US and across the continent to the forum. The stronger ties will ensure reciprocal trade and investment that will benefit both the US and Africa.
* Michael Currin is the Deputy Director-General Intergovernmental Coordination and Stakeholder Management at the Government Communication and Information System
Janine
Thu, 11/02/2023 - 08:54
287 views
Operalia Finalists Announced – The ‘World Cup of Opera’
Placido Domingo’s Operalia – the “World Cup of Opera” – has selected 12 (two of them South Africans) who will perform in Cape Town on Sunday 5th November 2023. In a closely contested semi-final round that played out at the Artscape Theatre yesterday, this year’s Operalia jury selected 12 singers, including South Africa’s Nombulelo Yende …
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Government addressing deficiencies that led to grey listing
Government addressing deficiencies that led to grey listing
Government is working hard to address deficiencies in the fight against organised crime and illegal financial flows, says Minister of Finance Enoch Godongwana.
“Since February, when South Africa was grey listed by the Financial Action Task Force (FATF), a large number of government departments and agencies – including the police and the Hawks, National Prosecuting Authority (NPA), Special Investigating Unit (SIU), State Security Agency (SSA), the Reserve Bank, Financial Sector Conduct Authority (FSCA) and South African Revenue Service (SARS) – have been working hard to address these deficiencies,” the Minister said.
Delivering the Medium Term Budget Policy Statement on Wednesday in Parliament, he said last week the FATF noted at its plenary meeting that such work is showing positive results.
South Africa has addressed 15 of the 20 technical deficiencies in its legal framework and has made good progress on 17 of the 22 effectiveness action items, including two that are now deemed to be largely addressed.
“However, there is also a significant amount of work that must still be done, particularly with regard to the investigation and prosecution of complex money laundering cases and terror financing, the identification of informal mechanisms for remitting money around the world, and the recovery of the proceeds from crime and corruption,” the Minister said.
Government expects to address all the deficiencies identified by the FATF by early 2025.
“We are also devising ways to make better and more targeted use of the Criminal Asset Recovery Account (CARA) to address crime. Among these efforts, and emanating from the Presidential project on illicit mining strategy, a recommendation has been made for Cabinet to consider using money from the fund to combat illegal mining.
“The South African Police Service, The Defence Force, the Financial Intelligence Centre, the Department of Home Affairs and the Border Management Authority have all received allocations from this fund,” the Minister said.
Improving efficiencies
He said over the Medium Term Expenditure Framework (MTEF) period, the focus is on improving efficiency and reprioritising funds towards key programmes.
The SAPS will contain costs and streamline operations as headcounts decline due to natural attrition.
“It will foster partnerships with communities and implement reforms to optimise resource allocation, training and technology. Government will continue to fill critical posts in the Border Management Agency and verify assets transferred from departments to the agency.
“To reduce employee compensation pressure, the Department of Defence will implement human resource reforms and review commuted overtime and allowance policies. Furthermore, funds will be reallocated in the Department of Defence to provide for day-to-day maintenance and emergency repairs,” the Minister said.
The Department of Justice and Constitutional Development will reallocate funds over the MTEF period to capacitate the Office of the Legal Services Ombud.
“Funding will also be shifted from the Department of Agriculture, Land Reform and Rural Development to Legal Aid South Africa to improve its capacity to provide legal representation in land rights matters.
“To strengthen its independence, the Judicial Inspectorate for Correctional Services will become a government component in 2024/25. Concomitant resources, currently in the baseline of the Department of Correctional Services, will be transferred with the inspectorate,” the Minister said.
Government will continue to fill critical posts in the Border Management Agency and verify assets transferred from departments to the agency. –SAnews.gov.za
nosihle
Wed, 11/01/2023 - 14:04
623 views
Revenue collection projected to decline
Revenue collection projected to decline
Revenue collection is expected to fall by some R56 billion below the 2023 Budget predictions, according to the National Treasury Medium Term Budget Policy Statement (MTBPS).
The MTBPS notes that slowing commodity exports, slower growth, downward revisions of the tax base growth, slowing corporate tax collections and lower net VAT collections have all impacted tax revenue.
The 2023 Budget had projected collections would reach some R1.78 trillion but that has now been revised down to R1.73 trillion.
“In recent years, revenue collection has benefited from a pattern of high prices for South Africa’s commodity exports. In the current year, commodity prices have fallen faster than expected and value‐added tax (VAT) refund claims have risen, resulting in revenue collections projected to be R56.8 billion below 2023 Budget estimates.
“The moderate revenue outlook is limited by the domestic economic outlook and negative shifts in the global economy,” the department said.
This as Minister of Finance Enoch Godongwana tabled the Medium Term Budget Policy Statement in Parliament on Wednesday.
Key factors which have affected revenue collection in the first half of 2023/24 include:
- Significantly reduced mining sector profitability. Mining provisional corporate tax collections fell by R24.6 billion or 55.4 percent relative to the same period in 2022/23. Lower commodity prices, weaker global growth, increased incidence of power cuts and logistical constraints have weighed heavily on the sector.
- VAT refund payments are R21.5 billion higher relative to the same period last year due to stronger-than-expected exports; increased investments in embedded generation; and higher costs of doing business, including the use of more expensive road rather than rail transport. Stronger import VAT collections partially offset robust VAT refund payments.
- A sustained recovery in earnings and higher bonus payments have benefited personal income tax collections, with employees’ tax from the finance sector driving the strong year-to-date growth.
“The tax-to-GDP ratio is expected to decline to 24.7 percent in 2023/24 from 25.1 percent in 2022/23. A recovery in this ratio depends on more sustainable economic growth.
“Main budget revenue estimates for 2023/24 have been lowered by R44.4 billion compared with the 2023 Budget, mainly driven by lower estimates for tax revenue, while National Revenue Fund receipts have been revised up by R11.3 billion mainly due to higher expected revaluation profits from foreign-currency transactions,” Treasury said.
Future revenue
The department said due to the increased fiscal consolidation that is required, “the Minister of Finance will propose tax measures to raise additional revenue of R15 billion in 2024/25 in the 2024 Budget”.
“Tax revenues are expected to increase to R2.1 trillion, or 25.1 percent of GDP, by 2026/27. Revenue collection, however, is projected to fall short of 2023 Budget estimates by R121.4 billion between 2024/25 and 2025/26, with tax buoyancies generally lower over the medium term.
“Relative to the 2023 Budget, main budget revenue estimates for the next two years have been lowered by R152 billion, mainly driven by downward revisions to tax revenue projections. Non-tax revenue estimates for the next two years have also been reduced by R24.4 billion due to lower mineral and petroleum royalties and departmental receipts. Payments to the Southern African Customs Union (SACU) are revised up,” the department said.
Treasury insisted that improved economic growth and further gains in tax administration are critical for improving tax revenues.
“The sharp contraction in commodity prices now under way suggests that the windfall tax receipts that South Africa enjoyed in recent years have come to an end. Under-collections in corporate income tax receipts relative to 2023 Budget estimates flow through to the outer years. Stronger VAT refund payments over the medium term partly reflect higher renewable energy investments and responses to structural constraints in logistics and fuel refinery capacity.
“The outlook for most major tax bases has also been revised lower relative to the 2023 Budget. Personal income tax collections are marginally better than expected due to near-term gains; however, medium-term prospects for employment growth remain muted.
“Although South Africa’s tax-to-GDP ratio remains relatively resilient, stronger economic growth and further gains in tax administration are needed to improve tax revenues over the medium to long term,” the department said. – SAnews.gov.za
NeoB
Wed, 11/01/2023 - 14:05
624 views
Rising government debt servicing hinders social spending
Rising government debt servicing hinders social spending
The servicing of government’s rising debt is “crowding out” social spending in the country, says Finance Minister Enoch Godongwana.
The Minister on Wednesday delivered the Medium Term Budget Policy Statement in Parliament, where he explained the challenge posed to spending on social services.
“It is important… to point out that our debt levels and rising debt service costs are not problems in and of themselves.
“Our challenge is that rising debt service costs are crowding out important social spending, and our economy has not grown fast enough to support increasing expenditure or our current debt levels. Therefore, this policy statement sets out our strategy for avoiding a fiscal crisis and preventing the build-up of systemic risks to the economy,” he said.
This strategy will include reduced spending and reprioritisation “while also taking concrete steps to support growth”.
“None of these decisions are taken lightly. They are taken with the short- and long-term viability of public finances in mind, and in the interests of balanced and inclusive growth,” Godongwana said.
He explained that over the past 15 years, government’s spending has exceeded revenue, with government expected to borrow an average of some “R553 billion per year over the medium term”.
“As a result, gross debt rises from R4.8 trillion in 2023/24 to R5.2 trillion in the next financial year. By 2025/26, it will exceed the R6 trillion mark. We now expect gross government debt to stabilise at 77% of GDP by 2025/26. This is higher than the level we forecast in February.
“Over the next three years, debt service costs, as a share of revenue, will increase from 20.7% in 2023/24 to 22.1% in 2026/27. The cost, or interest of this debt, for next year alone, amounts to around R385.9 billion. Over the MTEF [Medium Term Expenditure Framework], interest costs amount to R1.3 trillion,” he said.
Tightening purse strings
The Minister said in this current financial year, spending has been brought down by some R21 billion, with further reductions of R64 billion and R69 billion contemplated for the 2024/25 and 2025/26 financial years.
“The implications of these adjustments will be partially offset by departments implementing the cost containment guidelines issued by National Treasury.
“It will also be offset by implementing control measures on payroll systems, in line with the directive issued by the Department of Public Service and Administration, as well as implementing the recommendations from the spending reviews conducted in the past two fiscal years.
“Government has made a strategic decision to allocate funds to sectors that are personnel heavy, such as Health, Education and Police Services,” Godongwana said. – SAnews.gov.za
NeoB
Wed, 11/01/2023 - 14:06
520 views
WHO supports efforts to Combat Zero Dose Kids in the Eastern Cape Province
To reduce the increasing number of zero dose children in the Eastern Cape Province, the National Department of Health, planned a four-day Zero Dose training program for the province, fully funded by the WHO Regional Office for Africa, from 26-29 September 2023. The training took place in collaboration with United Nations (UN) partners, WHO South Africa and UNICEF. The training was designed to benefit senior program managers at the provincial, district, and sub-district levels, as well as facility staff responsible for disseminating knowledge to their constituencies. The training primarily focused on critically evaluating the status of zero dose children and developing micro plans to reach them, with a particular emphasis on the components of the Expanded Program on Immunization (EPI).
Immunization is a global health and development success story, saving millions of lives every year and is a key component of primary health care and an indisputable human right. It's also one of the best health investments. Vaccines are also critical to the prevention and control of infectious diseases and outbreaks thereof. While the Expanded Program on Immunization (EPI program) responsible for vaccines in South Africa in its schedule covers for eleven vaccine preventable diseases (VPDs), there are still children who do not have access to a single vaccine. These are called zero dose children.
The number of zero dose children has been increasing globally and South Africa is one of the priority countries for high zero dose children. Over the past 5 years, a total number of zero dose children in South Africa accumulated to almost 700,000 (682,967). In 2022 alone, South Africa recorded 147,674 and 19,127(15%) was from the Eastern Cape. The increasing immunity gaps due to the increasing zero dose children has contributed to the recent multiple vaccine preventable disease outbreaks which the country has battled, and this warrants urgent interventions to decrease morbidity and mortality due to VPDs.
The training focused on the all the components of EPI but mainly on critically reviewing where the zero dose children are, and developing micro plans aimed at reaching these children. Other topics covered included:
- Global and national strategic and guiding documents which are aligned to zero dose reduction.
- Demand creation and community mobilization
- Reach Every district strategy (RED)
- Supportive supervision
- Vaccine Preventable Disease Surveillance (VPDs) including Environmental surveillance (ES)
- Data management (using data for action) including the use of technology such (ODK app) for supportive supervision.
The way forward from the training was:
- Cascading the training to professional nurses through integration in existing trainings
- The province will coordinate the crafting of micro plans at facility level using RED Strategy guiding principles which when following the bottom-up approach will inform the subdistrict, then district micro plans.
- Monthly Review of process indicators, performance indicators and quality indicators.
- Data monitoring and reporting on nerve Centre program on weekly intervals which follow-development of action plans to close gaps.
- Demand Creation to reduce zero dose was highlighted as a critical area of focus.
Distributed by APO Group on behalf of World Health Organization (WHO) - South Africa.
COVID-19 social grant extended until 2025
COVID-19 social grant extended until 2025
Government has extended the COVID-19 Social Relief of Distress Grant (SRD Grant) until March 2025 while it considers social security policy reforms and a funding model.
The grant was introduced to support low-income individuals affected by the lockdowns during the COVID-19 pandemic.
Delivering the Medium Term Budget Policy Statement (MTBPS) to Parliament on Wednesday, Minister of Finance Enoch Godongwana said R34 billion has been allocated to extend the grant by another year.
“Over the medium term, a provisional allocation is retained while a comprehensive review of the entire social grant system is finalised. The 2023 Budget indicated that the COVID-19 Social Relief of Distress grant was only funded until March 2024.
“Government proposes that the fiscal framework make provision for funding for the grant for 2024/25. Beyond this, a comprehensive review of the entire social grant system by the Department of Social Development and the National Treasury is required,” Godongwana said.
Over the 2024 medium-term expenditure framework (MTEF) period, 61% of consolidated non-interest spending goes to the social wage — combined public spending on health, education, housing, social protection, transport, employment and local amenities.
“Of this amount, R945.9 billion will be spent on social protection transfers, including the old age grant, the child support grant, the disability grant and the COVID-19 social relief of distress grant. South Africa’s social protection expenditure programme, measured as a percentage of gross domestic product (GDP), is one of the largest among developing countries,” he said.
The 2019 MTBPS noted that by 2040/41, social assistance beneficiaries – excluding the temporary COVID-19 social relief of distress grant – were projected to increase to 22.5 million, necessitating spending on social grants amounting to 3 % of GDP annually.
“This is in line with current grants spending, excluding the temporary grant. If that or a similar type of new grant is made permanent, beneficiaries are projected to expand from 27.3 million in 2023/24 to 40.4 million in 2040/41, which will cost 3.8 % of GDP in 2040/41 and require a corresponding permanent source of funding, such as additional revenue measures,” he said.
Education
Although additional funding has been provided to implement the 2023 public-service wage agreement, provincial education departments are constrained in hiring additional teachers.
The Minister warned that this could lead to larger class sizes and higher learner-teacher ratios, possibly resulting in weaker educational outcomes.
“To mitigate this, the sector will improve the approach to allocating teachers to schools, ensure that learner and teacher support materials are used cost-effectively, manage infrastructure projects more tightly and focus on plans to catch up on lost teaching time,” Godongwana said.
Institutions in the post-school education and training sector, including the National Student Financial Aid Scheme, will need to bring their student enrolment and bursary allocations in line with their budgets.
Planned infrastructure spending will be brought in line with institutions’ ability to spend.
Continued health services
The Minister said the health sector is aiming to maintain service delivery amid budgetary constraints.
“While additional funding is provided to cover wage increases, baseline reductions are being implemented as part of fiscal consolidation. To minimise negative effects, the sector will need to improve efficiency in areas such as overtime payments, medical supplies and security services, and to delay infrastructure projects.”
The South African Law Reform Commission is finalising a report on legal reform to manage medico-legal claims, which constitute a significant financial risk.
“To address funding fragmentation for oncology services, allocations will be shifted from the national health insurance grant to the national tertiary services grant.
“A single grant is also proposed to consolidate the existing personal and non-personal services components of the national health insurance indirect grant. Funding is also redirected towards the Office of Health Standards Compliance to strengthen the Health Ombud,” the Minister said. –SAnews.gov.za
nosihle
Wed, 11/01/2023 - 14:07
774 views
R350-a-month grant to be extended to March 2025
Finance Minister Enoch Godongwana announces extension of Covid-19 grant
Fiscal consolidation needed to ensure marvelous financial health
Fiscal consolidation needed to ensure good financial health
Government will adopt a “prudent fiscal stance” which will aim to balance spurring economic growth, supporting society’s most vulnerable groups, stabilising public finances and reducing economic and fiscal risks.
This tough balancing act was revealed in the Medium Term Budget Policy Statement (MTBPS) released on Wednesday.
“A balanced fiscal stance will…also support higher levels of private-sector investment and employment. In the context of limited resources, this requires prioritisation. Over the next three years, the fiscal framework supports strong control of the public-service wage bill, protecting crucial frontline services and implementing efficiency measures.
“Government’s commitment to restoring the health of the public finances means that the debt-to-GDP ratio is still forecast to stabilise in 2025/26 – although at a higher level than projected in the 2023 Budget,” the document read.
The MTBPS laid out how it will implement fiscal consolidation measures including reduced spending, “efficiency measures across government and moderate revenue increases”.
“The proposed fiscal consolidation measures will be targeted, leaving some functions with funding levels similar to the 2023 Budget, and will also maintain the social wage. Over the medium term, these measures will include the reconfiguration of government, with the merging or closure of public entities resulting in a reduction in transfers to such entities.
“Together, these targeted measures are expected to result in savings and long-term gains from improvements in the efficiency of public spending and budget allocations. This is key to managing the public finances in a prudent and responsible way, and will also support longer-term economic growth.”
The key elements of government’s medium-term fiscal strategy as set out in the MTBPS include:
- Realising a primary budget surplus in the current year, meaning that revenue will exceed non-interest spending for the first time since 2008/09. The surplus will grow over the medium term, narrowing the budget deficit and allowing debt to stabilise by 2025/26.
- Stabilising debt to enable government to arrest the trend of rising debt-service costs. Debt-service costs will peak as a proportion of revenue in 2026/27.
- Targeting spending revisions to protect critical frontline services. Baseline budgets for basic education, health and the police are projected to grow in nominal annual average terms, although below consumer price index (CPI) inflation, over the 2024 medium-term expenditure framework (MTEF) period. Spending on the community and economic development functions will grow by 4.5 per cent and 6.2 per cent, respectively. In contrast, spending on general public services grows marginally over the medium term.
- Implementing a reconfiguration of government functions, as outlined in Chapter 1, in line with the President’s commitment during the 2023 State of the Nation Address.
- Keeping the composition of spending broadly in line with existing policy. Over the medium term, the wage bill continues to grow on average below CPI inflation. Over the next three years, capital payments and transfers will grow by a nominal annual average of 8.4 per cent, while consolidated spending on the wage bill, goods and services, and current transfers and subsidies grows by 3 per cent. Government is implementing measures to improve the financing and execution of infrastructure projects.
- Introducing moderate revenue increases to support fiscal consolidation, while limiting the negative effects on the economy.
- Developing new fiscal anchors to ensure sustainable public finances. Work on these is under way, and an update will be provided in the 2024 Budget. – SAnews.gov.za
NeoB
Wed, 11/01/2023 - 14:09
413 views
Government forges ahead with restructuring the State
Government forges ahead with restructuring the State
Work is underway to reconfigure the structure and size of the State as part of government’s efforts to improve the efficiency and effectiveness of public spending.
“This Medium-Term Budget Policy Statement (MTBPS) supports measures to lift our growth prospects over the medium term and restructures the State to become more effective,” Minister of Finance Enoch Godongwana said on Wednesday while delivering the MTBPS in Parliament.
Government is preparing a joint plan to rationalise departments, entities and programmes over the next three years
The Presidency, National Treasury, Department of Public Service and Administration and the Department of Planning, Monitoring and Evaluation are formulating high-level recommendations on programme and entity closures.
“A dedicated technical team, consisting of the appropriate legal, financial and human resource expertise has been created to facilitate implementation. Over the last three years, the National Treasury has conducted a series of spending reviews.
“In many cases, these reviews have highlighted deficiencies in policy choices and programme design, scale and cost. They have also revealed shortcomings in planning and implementation, which result in overlapping mandates and functions, and duplication of effort. Government considers these inefficiencies to place a further drag on the economy,” the Minister said.
The following criteria will be used to determine whether a department or entity should be closed or merged:
- The performance and size of the entity or department, especially if it is no longer fulfilling its mandate or does not have capacity to fulfil its mandate.
- The ability of a larger department to absorb the function(s) of a small department.
- The duplication and overlap of functions across departments and entities.
- The clarity and execution of the legislative mandate.
“The Department of Public Service and Administration, the National Treasury, the Department of Planning, Monitoring and Evaluation and the Presidency will, over the medium term, review and reconfigure executive functions to address duplication of functions, close ineffective programmes and consolidate departments and institutions.
“Measures will be proposed based on spending reviews conducted in 2020/21 and 2021/22, which suggest a general need to ensure that programmes are designed to be affordable and avoid overlapping policy mandates,” Godongwana said.
The changes are expected to lead to reduced executive responsibilities, higher fiscal credibility and savings in non-interest expenditure
Public sector wage bill
The 2023 public service wage agreement included higher-than-budgeted remuneration increases.
As such government has made a strategic decision to allocate funds to sectors that are personnel heavy, such as health, education and police services.
“Additional funding of R24 billion this year and R74 billion over the medium term will be used to fund the 2023/24 wage increase and the associated carry-through costs in these sectors.
“Since the 2023 Budget, several fiscal risks have materialised. Corporate tax collections – primarily mining sector revenue – underperformed and the revenue outlook weakened. The 2023 public-service wage agreement increased the cost of compensation of employees,” the Minister said.
He indicated significant trade-offs and claw-back mechanisms are being implemented to mitigate the impact of these higher costs on the fiscal framework and to contain the budget for compensation of employees.
“Government has issued a directive to national and provincial departments to implement control measures for creating and filling vacant posts, including restrictions on recruitment for less-critical posts. Government is assessing further controls on personnel budgets, including by providing incentives for early retirement,” the Minister said.
Godogwana said the presidential employment initiative will be extended for another year through repurposing of a portion of funds from existing public employment programmes such as the Expanded Public Works Programme and the Community Works Programme.
“A comprehensive review of public employment programmes is underway,” the Minister said. – SAnews.gov.za
nosihle
Wed, 11/01/2023 - 14:10
374 views
Municipalities apply for Eskom debt relief
Municipalities apply for Eskom debt relief
More than 60 municipalities who owe Eskom for unpaid bulk electricity services have applied for government’s debt relief arrangement.
This was revealed by Finance Minister Enoch Godongwana while delivering the Medium Term Budget Policy Statement (MTBPS) in Parliament on Wednesday.
“By October 2023, 67 applications had been submitted, totalling R56.8 billion or 97 % of total municipal debt owed to Eskom at end-March 2023. Twenty-eight applications have been approved; the remainder are being assessed and verified with provincial treasuries,” Godongwana said.
The programme was announced earlier this year to assist ailing municipalities who are struggling to pay their electricity bills.
“The debt-relief arrangement for Eskom outlined in the 2023 Budget noted that a large proportion of outstanding municipal debt is owed to Eskom. National government has introduced support to relieve municipalities of debt to Eskom.
“The debt…will be written off over a three-year period, in equal annual tranches. This is provided the municipality complies with set conditions. These conditions include enforcing strict credit controls, enhanced revenue collection [and] up-to-date payment of Eskom monthly current account.
“The ultimate goal is the profound transformation of these municipalities, by empowering them to build financial resilience, amplify their capacity to generate sustainable revenue, and rekindle a culture of paying for services rendered,” Godongwana said.
Eskom Debt Relief Amendment Bill
At the delivery of the MTBPS, Godongwana also tabled the Eskom Debt Relief Amendment Bill which seeks to enhance the “enforceability of the conditions agreed” under the R254 billion government to Eskom debt relief agreement.
“It provides for the payment of interest by Eskom on amounts advanced as part of the debt relief loan. The Amendment also provides for the reduction of the amount of debt relief available to Eskom, in the event that the entity does not comply with the National Treasury conditions.
“These principles and strict conditionalities, greatly enhanced by the Amendment, are a key part of how we will deal with Eskom and all other state-owned entities, to avoid a repeat of the mistakes of previous bailouts,” Godongwana said.
Meanwhile, the extended MTBPS says Eskom’s R254 billion debt relief has been incorporated into both the balance sheets of government and Eskom – “implying an increase in government debt”.
“As at 30 September 2023, government has disbursed R16 billion of the R78 billion debt relief for 2023/24. A task team has been established with officials from the National Treasury, the Department of Public Enterprises and Eskom to monitor compliance with the conditions and report quarterly on whether Eskom qualifies for the conversion of the loan to equity.
“This [debt relief] arrangement will enable the utility to undertake much‐needed maintenance and investment, and to improve its financial position. Eskom’s financial sustainability remains at risk from poor generating plant performance, declining sales, lack of cost‐reflective tariffs, rising municipal arrears and high debt‐service costs,” the policy statement noted. – SAnews.gov.za
NeoB
Wed, 11/01/2023 - 14:11
293 views
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