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SARS welcomes MTBPS, increases its compliance focus

Location: News

SARS welcomes MTBPS, increases its compliance focus

The South African Revenue Service (SARS) has welcomed the Medium-Term Budget Policy Statement (MTBPS) presented in Parliament by Finance Minister Enoch Godongwana on Wednesday. 

The MTBPS revised the February 2024 Budget net tax revenue forecast from R1.863 trillion to R1.8408 trillion.

SARS said as of 30 September 2024, it has collected gross revenue of R1 070.4 billion, yielding a net revenue of R846.2 billion and R224.3 billion in refund payments. 

The revenue performance was bolstered by stronger collections from CIT Provisional tax and lower-than-expected VAT and PIT refund payments. 

This was offset by lower-than-expected collections from Customs taxes, PAYE, and the General Fuel Levy. 

The areas that were adjusted downward are: 

  • Lower-than-expected previous year salary adjustments, reducing the nominal wage bill estimate from 8.4% in the 2024 Budget to 5.5% in the MTBPS 2024. 
  • Slower growth on capital projects across general government, public corporations and private sector, with gross capital formation anticipated to decline from 9.5% in the 2024 Budget to 5.2%.
  • Downward revision in outlook of nominal exports from 5.2% to 3.5%, as well as nominal imports from 6.0% to 3.8%.
  • At Budget 2024, a 13.8% growth in PAYE, based on the 8.4% growth in the wage bill, was assumed. PAYE collections for year-to-date (September 2024/25) amount to R340.0bn, lower than the PE by R12.0bn (3.4%) and higher than previous year by R30.8bn (10.0%).

SARS highlighted that the deficit in revenue collections was partially offset by strong collections in CIT provisional tax collections (at R150.2 billion) against an expectation of R141.4 billion, yielding a surplus of R8.8 billion, up by 2.7% or R3.9 billion from the previous year. 

The fuel levy has faced challenges this financial year due to a year-on-year decrease in fuel consumption, with 1.333 million litres less fuel used. SARS said that this decline, attributed to factors like reduced load shedding and a shift to alternative energy sources, has directly impacted the Net Fuel Levy, resulting in a 3.9% year-on-year contraction and a R7.2 billion shortfall.

Trade taxes also underperformed, as imports, which were expected to grow by 1.9%, have instead declined by 5.1% year-to-date. Total trade flows have decreased by R39.2 billion (or -2.0%) compared to the same period last year, primarily due to lower import flows of electrical machinery and vehicles.

SARS noted that Provisional Corporate Income Tax (CIT) collections reached R150.2 billion, recording a surplus of R8.8 billion (6.2%) and a year-on-year growth of R3.9 billion (2.7%), driven by the Finance, Electricity, and Manufacturing sectors. 

Collections exceeded the Budget 2024 target rate of -3.3%. However, the Mining sector continues to struggle with volatile commodity prices, particularly in Platinum Group Metals, Coal and Iron Ore, which has negatively impacted profitability and provisional payments. Additionally, the sector faces ongoing transport, logistics, and border crossing issues, leading to delays and higher export costs.

Despite having finalised ± 1.3 million more debt cases, which is almost 290% more than the previous year, SARS said its debt compliance efforts have yielded lower returns year-on-year by R9.3 billion, which equals to a 23.6% year-on-year contraction. 

SARS further recorded significant year-on-year increases in deferred payment arrangements, requests for suspension of payments, and final demands, highlighting the financial hardship taxpayers are experiencing and its impact on their ability to meet tax obligations.

“The SARS Strategic Intent will continue to focus on Voluntary Compliance, ensuring that taxpayers and traders have clarity and certainty regarding their obligations, along with the necessary tools to facilitate easy and straightforward compliance. Conversely, SARS will impose significant legal and administrative costs on taxpayers and traders who deliberately fail to meet their obligations,” the revenue service said.

SARS said that its compliance efforts continue to yield success in dealing with non-compliance in particular segments and tax products. To date, compliance revenue secured R110.1 billion, reflecting a growth of R8.1 billion (8.0%). 

The Revenue Service emphasised that it will continue to intensify its efforts to maintain visibility and reinforce compliance, with plans to invest further on compliance initiatives to close the tax gap by targeting various taxpayer segments. 

SARS Commissioner Edward Kieswetter said that in pursuing the attainment of the 2024/25 tax revenue estimate of R1 840.8 billion, SARS will be unrelenting in its drive to engender voluntary compliance. 

“Critical in this pursuit is to ensure that intermediaries charged by law to collect taxes on behalf of SARS pay it over. Importantly, SARS is ready to act against those who willfully and defiantly ignore their legal obligations by misrepresenting their true economic status. Those who enable this conduct are equally culpable. 

“Taxpayers who abdicate their legal obligations place a disproportionate burden on honest taxpayers. Taxes play a critical role in cushioning the most vulnerable and destitute in our society. In this respect, voluntary compliance is sacrosanct,” Kieswetter said.   

The Commissioner further emphasized that SARS will continue to intensify and deepen its existing administrative efforts. 

“We will continue to use sophisticated data science and artificial intelligence, to maintain the balance between service to taxpayers/traders, whilst managing risks to the fiscus by detecting dishonest taxpayers,” he said. 

SARS will deploy more data science and artificial intelligence (AI) to step up its focus on the following areas of compliance risk:

  • Broadening the tax base via third-party data sources: Leveraging data from both formal and informal sectors to widen the tax base.  
  • Work to register all taxpayers and traders, through predictive modelling, who ought to be on the register and ensure that they honestly file their declarations and pay their dues where necessary. 
  • Build its detection capability using machine learning models and Artificial Intelligence (AI) to significantly improve service and offer a seamless service to honest taxpayers. This will also be used to detect dishonest taxpayers, improve debt collection while expanding the tax base and deal with tax avoidance.
  • Enforcing trade laws against the illicit economy (Customs and Excise): Strengthening tools to detect and prevent illicit activities, including those related to tobacco, fuel, and illicit financial flows.
  • Focusing on dispute prevention and resolution: Prioritising products and strategies that prevent disputes that can be resolved.

“SARS is the nation’s treasure; a well-functioning tax and customs administration is a cornerstone to our vibrant democracy and should never be taken for granted. SARS seeks to ensure revenue sustainability by securing appropriate investment in SARS, and funding certainty. 

“From a human capital perspective, SARS will continue to attract, develop and sustain a workforce that is future ready. We will be building the leadership bench strength of SARS and protect the autonomy of the institution,” the tax revenue said. 

Despite the tough operating environment, SARS said it expects that the start of a cycle of interest rate cuts will spur consumption expenditure. This expansion is expected to drive economic growth and widen the tax base, resulting in buoyant corporate tax, and VAT revenues. 

Additionally, the introduction of the “Two-Pot” system is expected to increase the tax base in the short to medium term. 

“The 12 821 SARS staff, to whom we express sincere appreciation, will continue to work diligently in achieving the revised revenue estimate as presented by the Minister of Finance,” SARS said. – SAnews.gov.za

DikelediM
Thu, 10/31/2024 - 11:03

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Read moreSARS welcomes MTBPS, increases its compliance focus

President Ramaphosa to lead meeting with Limpopo Provincial Executive

Location: News

President Ramaphosa to lead meeting with Limpopo Provincial Executive

President Cyril Ramaphosa is on Friday expected to lead a meeting with the Limpopo Provincial Executive.

President Ramaphosa will meet with the Premier, Dr Phophi Ramathuba, and the Provincial Government Executive at the Council Chamber in Polokwane. 

The President who is set to deliver an opening address at the meeting, will be accompanied by Ministers and Deputy Ministers. 

“The meeting with the Limpopo Provincial Government’s Executive is a start of a series of engagements between the President and provinces aimed at enhancing intergovernmental coordination and improve service delivery in line with the priorities of the 7th Administration,” The Presidency said in a statement on Thursday.

President Ramaphosa will also meet with the Provincial Executive of the KwaZulu-Natal province ahead of the Presidential District Development Model (DDM) Imbizo next week. 

The Provincial Executive will present to the President its five-year program in alignment with the priorities of the seventh Administration. 

The meeting will also discuss various approaches to service delivery issues including interventions to improve service delivery at local government level.

President Ramaphosa and Premier Ramathuba will address the open session before the start of the meeting. 

The President is expected to lead the second DDM Presidential Imbizo under the Government of National Unity (GNU), in Umgababa, in KwaZulu-Natal.

The imbizo that is scheduled for Friday, 8 November.

Cabinet adopted the DDM in August 2019.

The DDM is an integrated planning model for cooperative governance which seeks to be a new integrated, district-based, service delivery approach aimed at fast-tracking service delivery. It also seeks to ensure that municipalities are adequately supported and resourced to carry out their mandate. - SAnews.gov.za

 

DikelediM
Thu, 10/31/2024 - 11:13

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Read morePresident Ramaphosa to lead meeting with Limpopo Provincial Executive

African countries reaffirm commitment to nuclear weapons treaty

Location: News

African countries reaffirm commitment to nuclear weapons treaty

South Africa has welcomed the convening and outcomes of the 6th Conference of States Parties (CSP) to the African Nuclear-Weapons-Free Zone Treaty, also known as the Pelindaba Treaty.

The meeting was held from 24 to 25 October 2024 at the headquarters of the African Union (AU) in Addis Ababa, Ethiopia. 

The Department of International Relations and Cooperation (DIRCO) said the States Parties have reaffirmed their commitment to the Pelindaba Treaty. 

They expressed concern over recent events and actions that have adversely impacted the operations of the Secretariat and the work of the African Commission on Nuclear Energy (AFCONE).

“They resolved to take the necessary measures to prevent such challenges in the future and strengthen cooperation among themselves and between the treaty structures,” the statement read. 

The department said the parties also reaffirmed the decision taken by the Chairperson of the African Union Commission (AUC) on 30 July 2024 to dismiss the former Executive Secretary, Enobot Agboraw. 

“They decided that a recruitment process to appoint a new Executive Secretary of AFCONE should commence urgently.” 

In addition, the States noted the difficult task of the South African government, as the host country, to implement the decision by the AUC Chair regarding the dismissal of the former Executive Secretary. 

However, they confirmed that no dispute exists between AFCONE and South Africa as the host country but expressed appreciation to the country for its continued cooperation and support and for hosting the AFCONE Headquarters.

“The Department of International Relations and Cooperation trusts that the pronouncement of the 6th CSP outcomes, as well as the dismissal by the High Court of South Africa on 18 September 2024, of the urgent application brought by Mr Enobot Agboraw, against the department regarding the withdrawal of his diplomatic immunities and privileges following termination of his employment contract as Executive Secretary of the AFCONE Secretariat. 

“This will effectively dispel the unfounded and false allegations in recent media reports against officials in the department, who have been carrying out their official responsibilities.”

Meanwhile, the department said South Africa remained fully committed to the Pelindaba Treaty and achieving its objectives. 

These include the establishment of an effective, impartial and professional Secretariat of AFCONE that can execute its mandate satisfactorily in promoting the peaceful application of nuclear energy on the African continent. 

“South Africa will continue to work with all States Parties to the Pelindaba Treaty to prevent any further reputational, operational and financial damage to AFCONE and its Secretariat and to restore its credibility in the interest of the African continent.” – SAnews.gov.za

Gabisile
Thu, 10/31/2024 - 11:35

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Read moreAfrican countries reaffirm commitment to nuclear weapons treaty

South Africa Welcomes the Convening of the Sixth Conference of States Parties to the African Nuclear Weapons Free Zone Treaty (Pelindaba Treaty)

Location: News

Republic of South Africa: Department of International Relations and Cooperation
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South Africa welcomes the convening and the outcome of the Sixth Conference of States Parties (CSP) to the African Nuclear Weapons Free Zone Treaty (Pelindaba Treaty) held from 24 to 25 October 2024 at the Headquarters of the African Union in Addis Ababa, Ethiopia.

States Parties to the Treaty reaffirmed their commitment to the Pelindaba Treaty and noted with concern recent events and actions that have negatively affected the operations of the Secretariat and the work of the African Commission on Nuclear Energy (AFCONE). They resolved to take the necessary measures to prevent such challenges in the future and strengthen cooperation among themselves and between the Treaty structures.

States Parties reaffirmed the decision taken by the Chairperson of the African Union Commission on 30 July 2024 to dismiss the former Executive Secretary, Mr Enobot Agboraw. They decided that a recruitment process to appoint a new Executive Secretary of AFCONE should commence urgently.

Furthermore, States Parties noted the difficult task of the Government of South Africa, as the Host Country, to implement the decision by the African Union Commission Chair regarding the dismissal of the former Executive Secretary and confirmed that no dispute exists between AFCONE and South Africa as the Host Country. The Conference expressed appreciation to South Africa for its continued cooperation and support and for hosting the AFCONE Headquarters.

The Department of International Relations and Cooperation (DIRCO) trusts that the pronouncement of the sixth CSP outcomes, as well as the dismissal by the High Court of South Africa (Gauteng Division: Pretoria) on 18 September 2024, of the urgent application brought by Mr Enobot Agboraw, against the Department regarding the withdrawal of his diplomatic immunities and privileges following termination of Mr Agboraw's employment contract as Executive Secretary of the AFCONE Secretariat, will effectively dispel the unfounded and false allegations in recent media reports against officials in the Department who have been carrying out their official responsibilities.

South Africa remains fully committed to the Pelindaba Treaty and achieving its objectives, including the establishment of an effective, impartial and professional Secretariat of AFCONE that can execute its mandate satisfactorily in promoting the peaceful application of nuclear energy on the African Continent.

South Africa will continue to work with all States Parties to the Pelindaba Treaty to prevent any further reputational, operational and financial damage to AFCONE and its Secretariat and to restore its credibility in the interest of the African Continent.

Distributed by APO Group on behalf of Republic of South Africa: Department of International Relations and Cooperation.

Read moreSouth Africa Welcomes the Convening of the Sixth Conference of States Parties to the African Nuclear Weapons Free Zone Treaty (Pelindaba Treaty)

SA working to promote inclusive growth, deal with high cost of living

Location: News

SA working to promote inclusive growth, deal with high cost of living

The South African government seeks to attract foreign investment to foster inclusive growth and tackle structural barriers faced by marginalised communities.

This is according to Deputy President Paul Mashatile, who was briefing Members of Parliament (MPs) in the National Assembly on Thursday. 

The Deputy President addressed several topics, including his recent working visit to Ireland and the United Kingdom.

He reflected on the keenness of investors from these two countries to tap into various South African sectors such as finance, energy, transportation and infrastructure development.

“The overall aim of this engagement was to reassure the world and investors that our country is stable and open for business. I must say, in all of these meetings, we were warmly received,” he told Parliament. 

In the United Kingdom, the Deputy President said he met with more than 20 institutional investors, who are already investing in South Africa.  

“We also engaged with the government of the United Kingdom to strengthen and renew the historically deep and rich bilateral relations between our two countries by exploring new initiatives and opportunities for enhancing trade and investments.” 

Following the working visit, government agreed to strengthen existing initiatives while exploring new opportunities to maintain strong trade and investor interest. 

“We anticipate that the upshot of our visit will contribute to an increase in the UK investors who have shown a strong interest in doing business in South Africa,” Deputy President Mashatile explained. 

In addition, he said the relevant ministerial teams presented opportunities in State-owned entities (SOEs), particularly Eskom and Transnet. 

“They dealt with issues of energy, rail and port projects and water infrastructure projects, including the handing of the investment project book that was developed by Infrastructure South Africa.”

However, the Deputy President believed that government alone would not be able to achieve the objectives of growing the economy and creating jobs. 

“As a result, we’re taking these steps to engage the private sector, particularly also foreign investors who are interested to come and invest in our country.”

The State is working hard to ensure the regulatory frameworks throughout government are friendly for investors who can come and invest. 

“So, we were quite impressed that many of those that we met were very happy. They were saying they will be taking advantage in South Africa so that we can create the necessary jobs that we want to create and empower many of our people, particularly young people,” Mashatile said.

G20 Presidency

The Deputy President is of the view that South Africa should use its G20 Presidency to prioritise its objectives of growing an inclusive economy that creates jobs. 

Preparations are underway for South Africa’s G20 Presidency and hosting the G20 Summit in 2025. South Africa is expected to take over Chair of the G20 from December 1 this year from Brazil. 

Mashatile said the State is determined to deal with the question of the high cost of living and professionalisation of the public service. 

“But we want to use that also to benefit the continent. So, what South Africa will do will ensure that, as we Chair the G20, [this] benefits the entire African continent, and we are looking at programmes of infrastructure.

“When leaders of various countries come here, they come with huge delegations, including business people, and therefore they look for opportunities. But we will make sure that there is sound infrastructure to be able to ensure that people can have meetings throughout the country.” 

The Deputy President announced that government has decided that it will concentrate meetings in one place, so the 2025 summit benefits the entire country. 

Skill shortages

Mashatile acknowledged that the local labour supply does not meet the demand for management personnel, professionals, engineers, technicians, educators, and information and technology experts, necessitating the temporary importation of high-level skills.

However, various measures are being implemented to improve local skills, including updating job listings, promoting the critical skills list, and enhancing vocational training in digital skills. 

Mashatile explained that the National Skills Fund directs resources to in-demand sectors and that the Human Resource Development strategy aims to match supply and demand for skilled workers. 

Meanwhile, he said collaboration among industry, government, education, and non-profits is crucial for effective skills development and local employment growth. – SAnews.gov.za
 

 

Gabisile
Thu, 10/31/2024 - 15:21

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Read moreSA working to promote inclusive growth, deal with high cost of living

Team established to deal with BELA Act concerns

Location: News

Team established to deal with BELA Act concerns

The Government of National Unity (GNU) clearing house mechanism has formed a task team to address concerns raised by various parties regarding the Basic Education Laws Amendment (BELA) Act.

This comes after leaders met on Wednesday to discuss the issue of the Act, which has two clauses that have been the centre of concern by some members of the signatories of the statement of intent of the GNU.

According to the Deputy President’s Office, the meeting was attended by most parties that participate in this structure. 

“The meeting noted the need to resolve the matter within the three months that President Cyril Ramaphosa has allocated.

“After an extensive engagement, the clearing house mechanism agreed on the establishment of a small team to work on the concerns as raised by some parties.” 

The team comprises Deputy Minister Andries Nel; Dr Cornelius Mulder from the Freedom Front Plus; Brett Herron from the GOOD Party; Helen Zille from the Democratic Alliance, and Mdumiseni Ntuli from the African National Congress. 

In September, President Cyril Ramaphosa signed the Bill into law but delayed by three months the implementation of clauses 4 and 5, which deal with school admissions and language, to make room for more discussion and deliberations after it received some opposition.

According to the Deputy President’s Office, the team has since been given two weeks to work and report to the clearing house mechanism. 

“The meeting also agreed on the need to put party-political interests aside and find a solution to benefit all South African people.” 

The GNU clearing house mechanism was established by President Ramaphosa last month to address policy disagreements within the 10-member GNU, led by Deputy President Paul Mashatile, regarding policy agreements and other disputes. – SAnews.gov.za
 

Gabisile
Thu, 10/31/2024 - 13:08

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Read moreTeam established to deal with BELA Act concerns

Godongwana lauds GNU for working well

Location: News

Godongwana lauds GNU for working well

While there might be a difference of opinion on how to address the myriad of challenges facing South Africa, the Government of National Unity (GNU) agrees on the strategic task of fiscal consolidation.

Addressing the RMB-Sunday Times post-Medium Term Budget Policy Statement (MTBPS) dialogue, Finance Minister Enoch Godongwana said while working on the budget, there was a unity of purpose on fiscal consolidation, although parties in the GNU may disagree on the pace of the fiscal consolidation.

"Doing the budget under the GNU was easy. We have the Minister’s committee on the budget. The three major budgets are represented there. There was not a single descending voice because we agree on the strategic task of fiscal consolidation.

“We are working very well [together]. We may differ on some issues but on substantive matters, we are on the same page. Despite what the analysts say, the GNU will be here for five years because there is a commitment with those in government to make it work and deliver,” the Minister said on Thursday in Cape Town.

Godongwana delivered the first MTBPS on Wednesday to Parliament since the GNU was established in the seventh administration.

“In the run up to the elections, our society was fractured. We needed to build a unity of purpose, and I think we have achieved that. The positive sentiment that has come out as a result of the GNU is quite impressive,” the Minister said.

Growing the economy

Godongwana emphasised that South Africa’s big challenge was growing the economy.

“If we had a growing economy, we would solve the issues of unemployment, poverty and the problem of debt. If we had a growing economy, we would have the capacity to service the debt. South Africa has to refocus on growing the economy. We have had a growth problem for more than a decade,” the Minister said.

To strengthen efforts to grow the economy, National Treasury has identified four pillars to lift the economy to a higher and more inclusive growth path.

The strategy is anchored on four pillars:
•    Creating a conducive environment based on maintaining macroeconomic stability;
•    Implementing structural reforms;
•    Supporting growth-enhancing infrastructure; and
•    Building State capability.

National Treasury has forecast a real Gross Domestic Product (GDP) growth of 1.1% in 2024 domestically. 

This is lower than the estimate of 1.3% in February. Over the medium-term, growth is forecast to average 1.8%.

“This underscores the need for higher inclusive growth to meet the aspiration of a better life for all. Pillar one is about a stable, transparent and predictable macroeconomic framework that creates a conducive environment for businesses and households to save, spend, invest and grow.

“The second phase will also introduce new focus areas that seek to strengthen local government, harness digital infrastructure and integrate urban environments to make cities more efficient.

“Pillar three is about effective infrastructure investment, to boost economic activity and enable higher growth over the medium term,” the Minister said.

Government is also implementing initiatives like early retirement, not to merely reduce the size of the workforce, but also to introduce younger talent to the public service.

“This is part of building a capable, ethical and developmental government. We will be harnessing digital infrastructure to roll out critical systems in the provision of service delivery,” the Minister said.

These initiatives include:
•    Digitising and simplifying the application and disbursement process for social grants;
•    Broadening access to employment pathways;
•    Rolling out digital identification documents;
•    Building a centralised and accessible website for all government services; and
•    Digitising health records management for the rollout of National Health Insurance. - SAnews.gov.za

nosihle
Thu, 10/31/2024 - 11:41

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Read moreGodongwana lauds GNU for working well

Green Building Trends in Africa: Africa’s Urbanization Provides the Opportunity to Embrace Green Building

Location: News
Bureau Veritas

By Julien Fouilliart-Building & Infrastructure Growth Leader Middle East, Caspian and Africa, Bureau Veritas (https://group.BureauVeritas.com)​.

Globally, buildings are responsible for a substantial share of energy, electricity, water and materials consumption using between 35-40% of energy demand and contributing 37 per cent of world carbon dioxide (CO2) emissions. Including the manufacturing of building materials.

The 2022 updated Global Buildings Climate Tracker (GBCT) (https://apo-opa.co/3YLJiZG) shows that there is a significant gap between the current state and the desired decarbonization path which is concerning. In effect it means that to align with the 2030 milestone, an annual increase of ten decarbonization points is now necessary which is a substantial jump from the six points per year anticipated starting in 2015.

In 2019 in Africa, buildings accounted (https://apo-opa.co/4e8NIhN) for 57% of total final energy consumption and 32% of total process-related CO2 emissions.

Despite continental issues of poverty, unemployment and rapidly developing informal settlements among other issues, many countries in Africa are embracing green, sustainable building practices.

With its burgeoning population, expected to add some  1.2 billion people by  2050 (https://apo-opa.co/3AxgxXo) Africa faces rapid urbanization.

Urbanization provides an opportunity for countries across Africa to embrace green building practices, access available international green funding opportunities, and set a foundation for sustainability for future generations.

In 2023 the Africa Regional Network of World Green Building Council (WorldGBC) launched the Africa Manifesto for Sustainable Cities and the Built Environment, which sets out the actions that  policymakers and businesses across the continent need to take to achieve a net zero carbon, healthy, resilient, equitable, socially- and economically-inclusive built environment for everyone, everywhere.

Achieving these goals requires policymakers and business leaders across the continent to recognise the untapped potential of the built environment. But this can only be realized with the implementation of policies that support transformative action, through intense collaboration between governments, city and regional leaders, businesses and investors. 

South Africa is leading Africa's green building sector (https://apo-opa.co/3YLdq7N). It has over two million square meters certified green buildings that reduce water consumption, electricity, and waste disposal; 50 certified projects are projected to result in an annual saving of 76 million kilowatt hours which is equivalent to the electricity needs of 5,300 households every year.

South Africa has its own National Standard 10400 Part XA that deals with optimizing energy efficiency in buildings and in the light of this the Green Star South Africa and EDGE green building tools have been adapted and are widely used in the country. International rating systems like LEED and WELL are also used.

The scope of green construction in Egypt has been slow to grow but Egypt has two local rating systems in place called TARSHEED and the Green Pyramid Rating System. These, along with EDGE, LEED and WELL are used in various projects.

The Nigerian government has pledged to achieve a 20% reduction in its greenhouse gas emissions by 2030 and 45% with international support. Green building will likely be a big part of this change.

This country's National Building Code, developed by the National Council on Housing and Urban Development, and the Building Energy Efficiency Guideline (BEEG), also support the agenda of sustainable development by setting requirements for occupant health and safety, use of local and safe building materials and energy efficiency among other criteria.

Morocco has several legal provisions in place to promote sustainability and environmental protection through construction impact assessments for new building projects as well as energy-efficient construction requirements applicable to most residential and commercial projects. Several projects in the country have also achieved LEED green building credentials.

It also has several renewable energy projects such as the Noor Midelt Solar Plant and Tarfaya Wind Farm, one of the biggest wind farms in the continent.

As the drive towards Net-Zero heightens more African countries are joining the African Regional Network of the World Green Building Council. NGOs and other industry professionals are setting up green building councils in South Africa, Egypt, Tunisia, Nigeria, Botswana, Zimbabwe, Namibia, Mauritius, Tanzania, Kenya, Cameroon and Uganda.

One of the big hurdles restraining a sustainable development movement in the construction industry is a lack of awareness for practical sustainable actions among many developers and investors.

In South Africa there is a broad awareness of Green Buildings and the market share of certified buildings among all new builds is increasing. The 2021 International Finance Corporation's (IFC) Green Building Market Stakeholder Assessment for South Africa showed that on the supply side, key motivating factors for Green Buildings are their reduced carbon footprint increased end user demand and increased marketability.

From the occupier's perspective the motivating factors for buying or leasing a Green Building are lower utility bills and lower operating costs. Yet, at a residential level occupiers are only willing to pay a two percent premium for these benefits.

The IFC report points out that the perceived cost of construction and certification of green buildings are also considered major obstacles to the expansion of certified Green Buildings in South Africa (https://WorldGBC.org/). Its research indicates that those in the know estimated the additional construction cost to be 10% or higher, while those unfamiliar with Green Buildings are likely to significantly overestimate costs.

Currently, four out of six financial institutions provide financing for Green Building projects in some form or another and three require a certification to approve the loan. The portfolios of two consist of retrofitting existing buildings into Green Buildings; two of commercial and industrial Green Building construction finance and only one residential Green Building construction finance. Of the two FI's that currently do not fund any Green Building one plans to do so in the future while the other does not see this as part of their strategy.

The investment into green construction (https://apo-opa.co/4e8NYgL) has multiple benefits; it facilitates growth while addressing issues like employment, climate change, and poverty.

However, more needs to be done to improve the understanding of the benefits of green buildings such as lower operational costs, increased ROI as well as an overall improvement in occupant health and wellbeing. Financial institutions need to do more to support green construction. Those which have pledged to lower their investments in carbon producing industries could create green bonds or funds for the African construction sector. Government's need to provide policy support along with incentives to catalyze market development.

 All this suggests that there is still a sizable information gap regarding the cost, certification and benefits of Green Building and that further knowledge dissemination efforts are needed to close it.

Distributed by APO Group on behalf of Bureau Veritas.

About Julien Fouilliart:
Julien Fouilliart is a seasoned business development professional with 15 years of experience in international, multicultural, and cross-sector environments. He currently leads the growth of Bureau Veritas' Building & Infrastructure market across the Middle East, Caspian, and Africa regions. Julien holds a degree in Mechanical Engineering from Belfort University in France. He is based in Kenya and has a deep passion for the African continent. Julien has played a key role in the development of large and iconic infrastructure projects across the region. He has an extensive international background, having worked in France, China, Spain, Belgium, and the United Kingdom. His experience includes collaborating with global companies and public institutions to drive business growth in sectors such as aerospace, IT, rail, building, and transport infrastructure.

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Read moreGreen Building Trends in Africa: Africa’s Urbanization Provides the Opportunity to Embrace Green Building

KZN Finance MEC welcomes MTBPS

Location: News

KZN Finance MEC welcomes MTBPS

KwaZulu-Natal Finance MEC, Francois Rodgers has welcomed the 2024 Medium Term Budget Policy Statement (MTBPS) presented by Finance Minister, Enoch Godongwana.

The Minister tabled the MTBPS in Parliament on Wednesday.

Rodgers said the budget accounts for necessary cost-containment measures, given the challenges of the national fiscus, but “ensures that essential spending areas are not comprised”.

Drawing inspiration from President Cyril Ramaphosa’s outline of priorities for the Government of National Unity, Rodgers said Godongwana asserted that government will continue to drive inclusive growth and job creation.

“The MTBPS was conservative and took into account the current economic climate. Projected economic growth at 1.1% remains weaker than ideal for a country that has a growing population such as ours.

“The infrastructure reforms, as announced by the Minister, are welcome as they bode well with government’s mission of ensuring inclusive growth, job creation as well as the building of a capable and ethical state. Government debt will reach more than R6.05 trillion, or 75.5 % of GDP [Gross Domestic Product], in 2025/26.

“The infrastructure reforms, as announced by the Minister, are welcome as they bode well with government’s mission of ensuring inclusive growth, job creation as well as the building of a capable and ethical state,” Rodgers said.

This as National Treasury expects improved growth prospects for the South African economy, despite slowing projected growth of some 1.1% in 2024 – down from the projected 1.3% earlier this year.

Real Gross Domestic Product (GDP) growth is projected to improve at some 1.1% in 2024, up from the 0.7% in 2023.

In the MTBPS, National Treasury said economic growth was being “weighed down by stop-start economic growth and stubborn inflation in the first half of the year”.

READ | Treasury optimistic about economic outlook
Minister Godongwana asserted that debt-service costs will reach R388.9 billion in the current financial year.

To counter this unsustainable debt increase, National Treasury has resolved to restrain spending and maintain stable tax collection.

Against the backdrop of a national debt, Rodgers welcomed the approach taken by National Treasury.

Rodgers said the biggest challenge remains the bloated government wage bill, noting this will again be a serious challenge to the fiscus as government has proposed a 4.5% wage increase but unions insist on demanding a 14% increase on salaries.

He said a clear and decisive policy needs to be implemented on addressing the challenges of the excessive wage bill.

At a recent budget council meeting, a resolution was taken that provinces would not have to face an unfunded wage agreement as in the past.

The increased wage agreement would be funded by National Treasury. 

Relating to the public sector wage bill, government is expected to propose a reignition of its early retirement programme.

This, as National Treasury attempts to further reel in the wage bill.

“Over the past decade, the wage bill has decreased as a share of consolidated spending, falling from 35.7% in 2013/14 to 32.1% in 2023/24. By 2027/28, the wage bill is projected to decrease to 31.4% of consolidated spending.

“To further contain public service wage costs, government is proposing to reactivate early retirement without penalties. To support this initiative, an additional R11 billion will be allocated over the next two fiscal years. Details will be set out in the 2025 Budget,” the MTBPS said.

READ | Government non-interest expenditure expected to increase

“We also welcome the Minister’s approach to public-private partnerships as well as cooperation with the private sector. A review of government’s approach to this is expected to be tabled next month [and] this is something that we look forward to.

“At provincial and local government levels, private sector involvement remains relevant. However, investors need to see the establishment of a capable and ethical state,” Rodgers said. – SAnews.gov.za
 

GabiK
Thu, 10/31/2024 - 10:51

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100 days in office: Advancing the strategic priorities of the GNU

Location: News

100 days in office: Advancing the strategic priorities of the GNU

By Deputy Minister Bernice Swarts

The first 100 days as Deputy Minister of Forestry, Fisheries, and the Environment, under the Government of National Unity (GNU), have been a period of significant learning and action. 

It has allowed me to engage closely with stakeholders in the sector, developing a blueprint to drive the implementation of the GNU's strategic priorities which are to fostering inclusive growth and job creation, reducing poverty and addressing the high cost of living, and building a capable, ethical, and developmental state.

The experience has been invaluable, providing me with a deeper understanding of the department’s mandate, core operations, and both domestic and international context.

Alongside Minister Dr Dion George and fellow Deputy Minister Narend Singh, we recently briefed the media on our progress in the department during this period. 

A key highlight of these 100 days has been the opportunity to engage with staff and various stakeholders, including the forestry sector, traditional leaders, firefighting personnel, community forest owners, young beneficiaries of departmental programs, field rangers from entities such as South African National Parks (SANParks), and industry players like the South African Weather Service (SAWS). These engagements have helped shape a shared vision for the department's future.

We kicked off our 100 days in the office by presenting the department's Budget Vote to Parliament on July 15, 2024. We delivered our department’s budget vote in a month where we celebrated our national unifying figure in the form of uTata Madiba – which seemed to tie in well with our mandate of unifying our people through the Government of National Unity.

In the first 100 days, we have initiated efforts to reengineer and repackage the department’s approach to wildland fire management. This involves building firefighting skills, especially in vulnerable rural communities, with a focus on women and youth. We aim to strengthen stakeholder engagement across both state and non-state actors to better deliver on our critical priorities.

As part of this initiative, I hosted stakeholder engagements with on the National Veld and Forest Fires Act, 1998 (Act No. 101 of 1998). These engagements were hosted with various stakeholders within the wildland fire management sector from both the North West and Free State. Some of the stakeholders who attended these engagements included local and provincial government departments, fire protection associations (FPAs) and other key players in the sector. 

Through these stakeholder engagements, I have instructed the officials to address challenges raised in these interactive engagements such as payment delays for FPAs, challenges on the use of government firefighting vehicles, training of FPA members as well as the clarification of the roles of different stakeholders. I am satisfied with the honest discussions and note the commitment of all parties to find practical solutions.

I have recently led the 2024 Forestry Summit at the Freedom Park in Pretoria. The Summit brought all stakeholders within the forestry sector under one roof to discuss pertinent issues within the sector such as the growth and transformation of the sector, forestry sustainability and the contribution of the sector in addressing climate change.

The Summit was interactive as it provided role players with an opportunity to freely engage with us on the challenges they face in the sector. What was even more fascinating was the involvement of traditional leaders who came from various parts of the country to raise issues their communities were facing. I am pleased with the decision that came out of this frank engagement, which includes plans to go to communities to address issues they have raised.

In the month of September, I had the privilege to lead both the launch and closing ceremonies of the 2024 National Arbor Month campaign. The launch was hosted at Freedom Park in Pretoria and the closing ceremony at Fort Cox Agriculture and Forestry Training Institute in Middledrift, Eastern Cape. A total of 6000 trees were planted in both the localities that hosted these ceremonies.

The Arbor Month campaign is aimed at raising awareness among South Africans about the importance of conserving, protecting, and planting trees for the benefit of both the environment and society.

As part of the Arbor Month launch, I planted the first tree to officially initiate the Forest of Freedom at the designated site at Freedom Park in honour of the heroes and heroines who contributed to South Africa's democracy and liberation struggle. The first 30 trees planted at the Forest of Freedom marks the 30 years of Freedom and Democracy in South Africa. World leaders and other luminaries visiting Freedom Park will get an opportunity to plant a tree in the Forest of Freedom, when it is ready. 

During the Arbor Month, I also took a deliberate decision to heighten the Presidential Ten Million Tree Programme, which is a clarion call by President Cyril Ramaphosa to all sectors of society led by DFFE. As the Deputy Minister of Forestry, Fisheries and the Environment, I am currently driving an ambitious campaign to relaunch the Presidential Ten Million Tree Programme by planting 1 million trees in one day, on a day to be announced soon.

I want to call on all South Africans – the three spheres of Government, forestry sector, private sector, labour, academia, civil society and many others to join this ambitious campaign by pledging and committing to providing and planting trees on that specific day and going forward. 

Trees are important for life. I call on all South Africans to plant trees today and build a better future for generations to come!
On July 31, we celebrated World Ranger Day at Kruger National Park, honoring the dedication of rangers who protect our natural heritage. Their commitment inspires our ongoing conservation efforts.

I also participated in the National Consultative Workshop on Early Warnings for All (EW4ALL), a UN initiative aimed at protecting people from hazardous weather events by 2027. We are committed to developing systems that not only safeguard the economy and infrastructure but also protect the lives and well-being of our people.

The first 100 days have been marked by hard work and significant strides towards delivering the priorities of the GNU. 
I look forward to continuing our work, confident that together we will achieve our shared goals for a prosperous, inclusive, and sustainable South Africa.

*Bernice Swarts is the Deputy Minister of Forestry, Fisheries and the Environment

Janine
Thu, 10/31/2024 - 10:24

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DPWI to accelerate EPWP work opportunities

Location: News

DPWI to accelerate EPWP work opportunities

The Department of Public Works and Infrastructure says it will accelerate the implementation of the Expanded Public Works Programme (EPWP) to meet the set target of millions of work opportunities.

This was said by Deputy Minister Sihle Zikalala during a Portfolio Committee meeting on Wednesday.

The implementation of the EPWP Phase V will focus on key service delivery interventions such as the restoration of the dignity of the indigent through vocational and Further Education and Training skills development and certification.

The department said the programme would be intensified to create job opportunities for the youth, women and rural poor communities, who bear the brunt of low economic growth and unemployment.

The department launched Phase V of the EPWP in April this year. Phase V covers the period from 2024 to 2029 and aims to create five million job opportunities. The department is enhancing the EPWP to make an impact and ensure effective exit plan. 

President Cyril Ramaphosa officiated over the celebration of 20 years of the programme in the Eastern Cape in April.

At the time, the Presidency said the EPWP was a nationwide government programme to create work opportunities and income support to poor and unemployed people through the delivery of public and community assets and services, thereby contributing towards development.

READ | President Ramaphosa sets sights on five million EPWP jobs in next five years

The improvement of data collection, verification, and recording of employment opportunities per EPWP sector will be important, said the Deputy Minister.

“Hence some of the sectors of focus in phase V will be waste management with recycling being the focal point, road paving, potholes patching and maintenance of public facilities," Zikalala said.

He emphasised the need to ensure collaboration between all spheres of government and the private sector. 

“The private sector can add value through their social corporate investment to augment a programme and projects like waste removal into recycling, which could in turn ensure environmental preservation,” he said.

In his closing remarks, Zikalala indicated that EPWP is needed in the country as a key job creation driver as it plays an important role in poverty alleviation, skills development, clearing of service backlog and the reduction of high unemployment rates. – SAnews.gov.za

Edwin
Thu, 10/31/2024 - 09:18

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Treasury optimistic about economic outlook

Location: News

Treasury optimistic about economic outlook

National Treasury expects improved growth prospects for the South African economy, despite slowing projected growth of some 1.1% in 2024 – down from the projected 1.3% earlier this year.

Real Gross Domestic Product (GDP) growth is projected to improve at some 1.1% in 2024, up from the 0.7% in 2023.

In its Medium-Term Budget Policy Statement (MTBPS), National Treasury said economic growth was being “weighed down by stop-start economic growth and stubborn inflation in the first half of the year”.

“The economy has since strengthened in response to the suspension of power cuts since March 2024, improved confidence following the formation of the Government of National Unity in June, better than expected inflation outcomes in recent months and reduced borrowing costs. All these factors are expected to continue supporting the economy over the period ahead.

“The pace of [GDP] growth is still being limited by persistent – though gradually easing – constraints, particularly in logistics infrastructure. Faster growth depends largely on maintaining macroeconomic stability, the continued implementation of structural economic reforms, improving State capabilities and supporting higher infrastructure investment,” the MTBPS stated.

Treasury explained that although risks persist, global risks are “weighted to the downside, while risks to the domestic outlook appear more balanced compared with the 2024 Budget Review assessment”.

“Global growth may weaken due to financial market volatility, tightening conditions for developing economies, slower disinflation from rising commodity prices and a prolonged contraction in China’s property sector. On the domestic front, food prices are vulnerable to weather-related shocks and logistical challenges. 

“Positive domestic risks include the possibility of a quicker pace of disinflation and interest rate reductions than assumed in the baseline forecast, which would boost demand. Stable electricity supply and faster progress on reforms could boost business and consumer confidence,” Treasury said.

The department warned, however, that fiscal risks “remain significant though somewhat more balanced than a year ago” and that the materialisation of these risks could be a threat to “fiscal projections, with negative consequences for investment and economic growth”.

“Despite the downward revision to growth for the current year, there is cautious optimism for the medium-term outlook as the early benefits of reform implementation continue to materialise. 

“The stabilisation of electricity supply has improved the overall investment climate. This positive momentum will be sustained by a new phase of Operation Vulindlela, which aims to accelerate structural reforms implementation. 

“To support these efforts, it will be essential to maintain clear and stable macroeconomic policies while strengthening state capability and supporting investment in growth-enhancing public infrastructure,” the MTBPS stated.

Global outlook

On the international front, global growth is projected to slow marginally from 3.3% in 2023 to 3.2% in 2024 and 2025.

“Slowing inflation has opened the way for major central banks to ease monetary policy. Lower interest rates and strong investment in technology, particularly in emerging Asia, are expected to support growth,” Treasury said.

The department added that overall risks to growth are “to the downside”.

“Fiscal policy has begun to contract in some countries, in part to manage the rapid increase in sovereign debt levels since the COVID-19 pandemic, and some countries are in debt distress.

“Persistent geopolitical tensions continue to flare, with potentially far-reaching effects on global trade, and the threat of escalating conflict in the Middle East remains a concern. The years-long downturn in China’s property sector, notwithstanding new stimulus support, could continue to weaken Chinese growth,” the MTBPS stated.

Economic growth in advanced economies is forecast to reach some 1.8% in the same period with growth in emerging and developing economies – including South Africa’s BRICS partners – projected at 4.2%.

In Sub-Saharan Africa, this is projected at 3.6% in 2024 and 4.2% in 2025.

“Global equity prices have risen as inflation decelerates, accompanied by interest rate cuts that are expected to continue into 2025. Further declines in bond yields are consequently anticipated, creating a favourable environment for emerging market assets. 

“Declining production and shipping of commodities, particularly oil, has dampened the outlook for some emerging and developing economies, including in Sub-Saharan Africa. Oil prices are anticipated to fall slightly in 2024, given weak global demand, despite production cuts agreed by major producers. 

“Global food prices are also projected to fall, supported by record-high grain production, reducing inflationary pressures,” the MTBPS explained. – SAnews.gov.za

Matona
Thu, 10/31/2024 - 05:44

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Government assigns funding for G20 Summit

Location: News

Government assigns funding for G20 Summit

With South Africa assuming the G20 Presidency later this year, government will assign additional funding to those departments that will be involved in the preparations.

“This is a rare opportunity that only comes around every 20 years. We intend to use our voice to promote a truly Africa-focused agenda,” Finance Minister Enoch Godongwana said on Wednesday in Parliament when tabling the Medium-Term Budget Policy Statement (MTBPS).

South Africa will hold the G20 Presidency from 1 December 2024 to 30 November 2025.

The G20 brings together the countries with the largest economies in the world. The Member States meet annually to discuss economic, political and social initiatives.

“Various government departments and institutions will be involved, with National Treasury and the Reserve Bank leading the finance track, and the Department of International Relations and Cooperation leading the Sherpa track.

“Examples of key topics already selected include accelerating human capital development in the context of artificial intelligence, migration, technology, education and skills gaps; strengthening multilateral development banks to support the development of poorer countries, and financing climate-resilient infrastructure. 

"These and other priorities will anchor South Africa’s contribution to the global policy agenda,” the National Treasury’s document on the 2024 MTBPS said.

South Africa will assume the presidency of the G20 from Brazil. It will be held under the theme: “Solidarity, Equality and Sustainable Development”.

“Our presidency is the fourth consecutive one where an emerging economy will lead the forum that influences global economic issues,” the Minister said. - SAnews.gov.za

nosihle
Wed, 10/30/2024 - 13:28

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Slow compliance with servicing Eskom debt a risk to debt write-offs

Location: News

Slow compliance with servicing Eskom debt a risk to debt write-offs

National Treasury has warned that municipalities' slow compliance with conditions of the debt relief programme on arrears to Eskom risk delaying debt write-offs.

According to the National Treasury’s document on the Medium-Term Budget Policy Statement (MTBPS), success depends on municipalities maintaining a quarterly revenue collection rate of 85 %, which is below the National Treasury collection norm for local government of 95 %.

“Around 70 of the municipalities that had applied for debt relief have been approved. Between March and August 2024, compliance with relief conditions by municipalities improved from 55% to 76 %, aided by the National Treasury, Provincial Treasuries, and the Municipal Finance Improvement Programme,” Minister of Finance Enoch Godongwana said.

The Minister was delivering the MTBPS in Parliament on Wednesday.

National government is supporting municipalities with debt relief for arrears to Eskom to be written off in equal annual tranches over a three-year period provided they comply with the set conditions.

This programme, operating on rolling 12-month cycles, aims to mitigate fiscal risks by improving compliance with financial management and revenue collection. By combining debt relief and revenue enhancement, it aims to change the nonpayment culture for municipal services and support Eskom’s balance sheet.

“Rand West City is the first municipality to benefit from a one-third debt write-off. This follows its substantial achievement of the debt-relief conditions for the first 12-month cycle.  More municipalities stand to benefit from this write-off of debt if they comply with the conditions of the programme. We implore provincial and national departments owing municipalities to pay their dues.

“This will enable municipalities to pay waterboards and Eskom, so that utilities can deliver these services to citizens,” the Minister said.

Despite these efforts, the financial situation of the top 14 Eskom defaulters remains critical, requiring alternative solutions.

The National Treasury, with stakeholder departments and Eskom, is exploring additional strategies in this regard.

Municipalities have been encouraged to offer relief to indebted customers who pay current bills and transition to smart prepaid metering. 

Eskom’s financial condition

According to the National Treasury, Eskom remains highly dependent on government support through the debt-relief arrangement. 

“The utility has begun to strengthen its performance, with no power cuts since the end of March 2024 and improved profitability. Its most recent financial plan also targets profitability from 2026/27 onwards. However, escalating municipal debt arrears continue to negatively affect its financial performance.

“The debt-relief arrangement granted to Eskom is intended to strengthen its balance sheet, enabling it to restructure and undertake the investment and maintenance needed to support stable electricity supply aligned with national needs,” National Treasury said.

Given Eskom’s failure to dispose of the Eskom Finance Company by 31 March 2024, the National Treasury reduced the debt-relief allocation from R78 billion to R76 billion in 2023/24. 

This allocation was fully disbursed and converted to equity following Eskom’s compliance with all the attached conditions. Eskom’s allocation for 2024/25 will be reduced by R2 billion to R64 billion should it fail to dispose of the Eskom Finance Company by 31 March 2025.

“In April 2024, the Eskom Debt Relief Act (2023) was amended to ensure that the loan granted under the debt-relief arrangement is correctly classified and that market-related interest is charged.

“Additionally, in June 2024 the National Treasury disbursed an R8 billion interest-bearing loan as part of the debt-relief allocation for 2024/25. 

“As of 27 September 2024, Eskom had paid R91 million in interest to the National Treasury for the debt-relief loans. The National Treasury is now working with Eskom to finalise government’s takeover of R70 billion of Eskom’s loan portfolio by 2025/26,” National Treasury said. - SAnews.gov.za

nosihle
Wed, 10/30/2024 - 14:15

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Government looks into insurance for climate-related disaster events

Location: News

Government looks into insurance for climate-related disaster events

Government is exploring options for purchasing insurance for certain climate-related disaster events, where such a practice would not undermine budget sustainability.

Tabling the 2024 Medium-Term Budget Policy Statement (MTBPS) in Parliament, Finance Minister Enoch Godongwana said climate-related disasters have intensified, damaging infrastructure and disrupting life.

“The increasing frequency and intensity of climate disasters is costly, and we must proactively work to reduce their impact on the fiscus and on society,” the Minister said on Wednesday.

National Treasury’s document on the 2024 MTBPS indicated that methods previously developed by the public and private sectors to manage disaster response and recovery are becoming unrealistic in terms of their costs.

“National Treasury is undertaking a detailed analysis of the experience of local governments regarding their access to emergency financing and their ability to disburse it.

“This analysis will help us better understand their capacity to manage a multi-layered, disaster risk finance approach.

“It will look into the willingness of municipalities to independently manage their financial response to disasters, existing incentives to invest in readiness, and their ability to set aside sufficient funds for their response,” the Minister said.

He said the recommendations of the disaster risk financing strategy will be implemented from 2025 to improve readiness and response time.

Rebuilding and rehabilitation of infrastructure damaged by floods

The 2024 Adjustments Budget includes unforeseeable and unavoidable adjustments dedicated to support the rebuilding and rehabilitation of infrastructure damaged by floods across multiple municipalities and provinces.

“Provincial allocations include an additional R948 million for infrastructure reconstruction in the Western Cape due to flood damage, with funds allocated to the provincial roads’ maintenance grant, the health facility revitalisation grant, the comprehensive agricultural support programme grant and the education infrastructure grant. 

“Additionally, R35.7 million is rolled over for the school infrastructure backlogs grant in the Eastern Cape, and R251 million is added in the education infrastructure grant for the Western Cape Rapid School Build Programme through the Budget Facility for Infrastructure,” National Treasury said.

Local government allocations include R684 million for the municipal disaster recovery grant to repair flood-damaged infrastructure across several provinces, with specific amounts allocated to Eastern Cape, Free State, KwaZulu-Natal, Limpopo and Mpumalanga municipalities. - SAnews.gov.za
 

nosihle
Wed, 10/30/2024 - 14:19

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Government to establish unit to deal with money laundering

Location: News

Government to establish unit to deal with money laundering

As part of efforts to exit the Financial Action Task Force (FATF) grey list, government will establish a shared forensic capability within the Financial Intelligence Centre to strengthen efforts to exit the grey list.

“From the 2025 Medium‐Term Expenditure Framework (MTEF) period onwards, funding will be reprioritised within the function to departments and entities to establish a shared forensic capability within the Financial Intelligence Centre,” National Treasury’s document on the 2024 Medium Term Budget Policy Statement (MTBPS) said.

This will strengthen efforts to combat money laundering and the financing of terrorism and secure South Africa’s removal from the grey list.

Tabling the MTBPS in Parliament on Wednesday, Minister of Finance Enoch Godongwana noted that South Africa recently received a positive review from the FATF.

South Africa is now deemed to have largely addressed 16 of the 22 action items in its Action Plan to exit the grey list.

“This is a remarkable achievement, brought about by the unprecedented cooperation between state departments, as well as with civil society.

“FATF lauded South Africa for improving how it dealt with issues of Anti-Money Laundering and Countering the Financing of Terrorism. This leaves us with only six outstanding action items to be addressed for the last scheduled reporting cycle in February 2025,” the Minister said.

The FATF is the international standard-setting body that oversees global compliance with anti-money laundering rules.

READ | SA records progress in exiting grey list

The FATF grey list refers to the FATF’s practice of publicly identifying countries with strategic AML/CFT deficiencies. The FATF maintains two such lists with one being jurisdictions under “increased monitoring” that are actively working with the FATF to address strategic deficiencies in their regimes” and secondly “high-risk jurisdictions subject to a call for action” that are not actively engaging with the FATF to address these deficiencies. -SAnews.gov.za
 

 

nosihle
Wed, 10/30/2024 - 14:24

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Government anchors economic growth strategy on four key areas

Location: News

Government anchors economic growth strategy on four key areas

Over the medium term, government will anchor its economic growth strategy on four key areas in order to support inclusive growth.

This as Finance Minister Enoch Godongwana announced in the Medium Term Budget Policy Statement (MTBPS) speech that economic growth projections have been revised down from 1.3% to 1.1%.

Godongwana delivered the MTBPS speech in Parliament on Wednesday.

“[Our] fiscal strategy sets to out to achieve the fiscal sustainability needed to support inclusive economic growth.

“It carefully weighs competing demands, making the necessary trade-offs between what is most urgent and what must wait given the fiscal constraints. The strategy also supports critical social services and addresses the significant fiscal and economic risks that lie ahead,” he said.

The four key pillars are:

  • Maintaining macroeconomic stability
  • Implementing structural reforms
  • Building state capability
  • Supporting growth-enhancing public infrastructure investment.

“Pillar one is about a stable, transparent and predictable macroeconomic framework that creates a conducive environment for businesses and households to save, spend, invest and grow.

“The National Treasury has the responsibility for oversight and implementation of the macroeconomic policy framework. Anchoring inflation expectations is important for our macroeconomic policy framework, and this what the Reserve Bank is responsible for.

“To strengthen this framework, we continue to work on assessing the suitability of monetary policy targets, and to improve the levers of macroeconomic policy coordination,” Minister Godongwana said.

The second pillar is aimed at the implementation of structural reforms and accelerating Operation Vulindlela.

“These will continue to strengthen the economy to be more productive and internationally competitive, accelerate inclusive economic growth and foster much-needed job creation.

“The first phase of Operation Vulindlela provides tangible evidence that structural reforms can reduce economic bottlenecks. It also demonstrates that government can collaborate effectively with business for the collective good,” he said.

In terms of supporting growth-enhancing infrastructure, Godongwana said this is about “effective infrastructure investment, to boost economic activity and enable higher growth over the medium term”.

“In this regard, we are implementing reforms that will create conditions to attract greater private sector participation. The reforms include mobilising significant private sector financing and technical expertise to augment the limited public sector capacity and capability.

“We are amending the PPP [Public Private Partnership] regulations to simplify requirements for undertaking these projects. The amended Treasury Regulation 16 will be published before the end of November for implementation in 2025/26. The Municipal PPP Regulations 309 will be finalised by June next year.

“We are establishing dedicated capacity to plan, prepare and design programmes that will generate a credible pipeline of projects that can be taken to the market,” he said.

Pillar four, according to the Minister, seeks to “build a capable state that delivers a reasonable and reliable standard of public service that will foster the necessary environment for more growth and jobs”.

“For this reason, additional funding is proposed for Parliament and the Office of the Chief Justice, mostly to enhance operational capacity in the running of these important institutions. With the Local Government Elections due in 2026, funds have been set for the Independent Electoral Commission to conduct smooth elections. 

“Additional funding for the South African Revenue Service is proposed. This is to help the organisation build on its successes by driving programmes to enhance the efficiency of revenue collection, whilst enhancing compliance and facilitating legitimate trade,” he said. – SAnews.gov.za

NeoB
Wed, 10/30/2024 - 14:41

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Government to launch next phase of Operation Vulindlela

Location: News

Government to launch next phase of Operation Vulindlela

Government is expected to launch the next phase of Operation Vulindlela, which is aimed at accelerating the implementation of structural reforms.

This is according to the Medium-Term Budget Policy Statement (MTBPS) released by National Treasury on Wednesday.

Treasury explained that the country’s economic growth prospects are closely tied to Operation Vulindlela and structural reforms to “improve competitiveness and productivity and boost investment”.

“In its first phase, this initiative implemented 35 reform actions in five network industries, including reducing power cuts, improving the performance of the logistics system, lowering data costs, improving water supply and enabling the country to attract critical skills.

“The next phase of reforms will support higher medium-term growth, which is required to significantly expand employment. New initiatives aim to reverse local government decline, tackle spatial inequality and advance digital government to improve large-scale service delivery,” National Treasury said.

Operation Vulindlela is a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms and support economic recovery.

Government has set its focus on Eskom’s restructuring as a priority and to establish a bustling energy market, with adequate supply for a growing economy.

“The cumulative effects of reforms include improved power station performance and no ‘load shedding’ since 26 March 2024. The Electricity Regulation Amendment Bill was signed into law in August of this year. 

“This, together with the creation of the National Transmission Company of South Africa, which began operating on 1 July 2024, is establishing rules and procedures for a competitive electricity market. 

“The ongoing Energy Action Plan has boosted efforts to restore energy availability and procure new generation. By end-August 2024, project registrations with South Africa’s energy regulator exceeded 8500 megawatts,” the MTBPS stated.

The critical sector of freight rail logistics is also receiving attention.

“Transport reforms that open the freight rail network to private operators will reduce inefficiencies and costs, helping firms offer lower prices and boosting economic growth. To this end, the Economic Regulation of Transport Bill – enabling private-sector use of the rail network – was signed into law in June 2024. 

“Transnet freight volumes grew from 149.5 million tonnes at the end of the previous financial year to approximately 151.7 million tonnes by end-March 2024, supported by the implementation of a recovery plan from October 2023 and reversing a years-long decline. Port cargo handled has stabilised relative to 2023 levels,” National Treasury stated.

Treasury emphasised that reforms in the water sector are critical for economic growth and water security.

“The National Water Resources Infrastructure Agency Bill, signed on 27 August 2024, creates an independent agency to oversee bulk water resources. The Water Services Amendment Bill, allowing for intervention in failing municipalities, has received public comment and will soon be submitted to Cabinet for approval,” Treasury said.

Reforms in that sector target supply and infrastructure challenges.

“Water sector reforms being prioritised by Operation Vulindlela include independent regulation, strengthening local water services by licensing water service providers, legal proceedings on non-compliance by municipalities and trading services reforms. 

“Trading services reforms refer to governance, institutional, management and financial reforms to improve essential services, enabled by a new performance-based grant. The National Treasury is also working closely with the Water Partnerships Office to identify opportunities for private sector participation, such as non-revenue water projects. Non-revenue water refers to the revenue lost from leaking water infrastructure.

Elsewhere, the visa system has been reformed by the Department of Home Affairs to attract skills and boost tourism while the rollout of 5G infrastructure has tapered data costs, expanded connectivity and improved access to network services. – SAnews.gov.za

NeoB
Wed, 10/30/2024 - 14:46

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SA must manage debt better, says Godongwana

Location: News

SA must manage debt better, says Godongwana

Finance Minister Enoch Godongwana has told Parliament that in order for government to achieve its goals of, amongst others, inclusive growth and reducing unemployment, the country must better manage its debt.

He was delivering the Medium-Term Budget Policy Statement (MTBPS), in which he revealed that government debt is anticipated to exceed R6.05 trillion, or 75.5 % of gross domestic product (GDP), in 2025/26.

“Debt has risen too fast and is too high. We know that our debt is unsustainable, because debt-service costs have become the largest component of our spending, and it is rising faster than economic growth. Debt-service costs will reach R388.9 billion in the current financial year.

“Put differently, this means for every one Rand of revenue that government raises this year, 22 cents of this is paid in debt-service costs,” he said.

Godongwana said to deal with this, government has taken “difficult steps to reduce the budget deficit”.

Over the medium term, the main budget deficit is expected to fall from 4.7% of GDP in 2024/25 to some 3.4% in 2027/28.

The primary budget surplus is expected to rise to 1.8% of GDP.

“We have restrained spending and maintained stable tax collection. As a result of our measures, government achieved a primary budget surplus in 2023/24, for the first time in 15 years. As I said earlier, the surplus is needed for us to stabilise debt.

“The primary surplus is not a pot of money. Rather, it is the difference between what government spends, excluding debt-service costs and what government collects in revenue.

“The primary surplus will be sufficient for debt to stabilise at 75.5 % in 2025/26. Debt will then decline over the rest of this decade. The key impact of this is that debt service costs will also stabilise and begin to decline over the next few years,” Godongwana said. – SAnews.gov.za

NeoB
Wed, 10/30/2024 - 19:03

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Government non-interest expenditure expected to increase

Location: News

Government non-interest expenditure expected to increase

Finance Minister Enoch Godongwana says government non-interest expenditure is expected to increase in 2024/25. 

He was delivering the Medium-Term Budget Policy (MTBPS) statement speech in Parliament on Wednesday.

The increase is mainly attributed to:

  • Rollovers from the previous financial year, to the value of R2.1 billion.
  • R2.7 billion expenditure that was announced at the time of the main budget, mainly for the COVID-19 Social Relief of Distress Grant.
  • Unforeseeable and unavoidable expenditure of R2.1 billion, mainly for disaster relief.
  • A special appropriation bill that mostly covers the South African National Roads Agency SOC Ltd (SANRAL) obligations related to phase 1 of the Gauteng Freeway Improvement Programme (GFIP). A large part of this appropriation is made possible by the Gauteng Provincial Government honouring its R3.8 billion contribution to the debt this year.

“Our most immediate spending pressures will be addressed, despite the weaker revenue,” Godongwana said.

In the expanded MTBPS, National Treasury said the increases are partially offset by “declared unspent funds, projected underspending, contingency reserve drawdowns and provisional allocations not assigned to votes”.

“Relative to the 2024 Budget, debt-service costs are revised up by R6.7 billion,” said Treasury.

Looking further ahead, over the next two years, the main budget non-interest expenditure is expected to grow by a net of R32.4 billion, including the proposed increases:

  • R11 billion to implement early retirement measures over 2025/26 and 2026/27 to manage the public service wage bill.
  • R3.2 billion for the contribution from national government to the repayment of SANRAL GFIP debt in 2025/26.
  • R10.1 billion for the provincial portion of SANRAL debt repayment relating to the GFIP and the maintenance backlog, which will be transferred to SANRAL. This amount will be paid to National Revenue Fund by Gauteng Province.
  • R3.5 billion for carry-through costs for the deployment of South African National Defence Force (SANDF) troops in the Democratic Republic of the Congo.

“Compared with the 2024 Budget, the expenditure ceiling has increased by R16.8 billion per year in 2025/26 and 2026/27. Most of this increase is due to a repayment of SANRAL debt relating to the GFIP and early retirement costs,” Treasury said.

Relating to the public sector wage bill, government is expected to propose a reignition of its early retirement programme.

This, as National Treasury attempts to further reel in the wage bill.

“Over the past decade, the wage bill has decreased as a share of consolidated spending, falling from 35.7% in 2013/14 to 32.1% in 2023/24. By 2027/28, the wage bill is projected to decrease to 31.4% of consolidated spending.

“To further contain public service wage costs, government is proposing to reactivate early retirement without penalties. To support this initiative, an additional R11 billion will be allocated over the next two fiscal years. Details will be set out in the 2025 Budget,” the MTBPS said.

Furthermore, National Treasury said negotiations for the 2025/26 wage agreement have commenced and are “expected to conclude by the time of the 2025 Budget”.

“Government is committed to a fair and respectful collective bargaining and negotiation process in determining remuneration levels and conditions of service, while meeting its constitutional obligation to respect the budget process and deliver responsible and affordable fiscal policy,” National Treasury said. – SAnews.gov.za

NeoB
Wed, 10/30/2024 - 14:47

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Reforms to attract infrastructure investment

Location: News

Reforms to attract infrastructure investment

Minister of Finance Enoch Godongwana has announced reforms that will create conditions to attract greater infrastructure investment by private sector participation.

“Collectively, the infrastructure reforms will strengthen planning, appraisal, contracting, financing, and monitoring and evaluation. The outcome will be faster delivery of infrastructure that supports economic growth, the expansion of access to basic services and boosting job creation,” Godongwana said on Wednesday.

Tabling the 2024 Medium Term Budget Policy Statement (MTBPS) in Parliament, the Minister said one of the strategies aimed at lifting the economy to higher and towards a more inclusive growth path is supporting growth enhancing infrastructure.

“Pillar three is about effective infrastructure investment, to boost economic activity and enable higher growth over the medium term. In this regard, we are implementing reforms that will create conditions to attract greater private sector participation,” Godongwana said.

The reforms include:
• Mobilising significant private sector financing and technical expertise to augment the limited public sector capacity and capability.
• We are amending the PPP regulations to simplify requirements for undertaking these projects.
• The amended Treasury Regulation 16 will be published before the end of November for implementation in 2025/26. The Municipal PPP Regulations 309 will be finalised by June next year.

“We are establishing dedicated capacity to plan, prepare and design programmes that will generate a credible pipeline of projects that can be taken to the market.

“The Department of Water and Sanitation’s Water Partnerships Office has two priority programmes for non-revenue water and recycling wastewater that require private investments.

“Similarly, the Department of Transport, Transnet and the Passenger Rail Agency of South Africa are finalising a list of priority projects that will be issued to the market in 2025/26,” the Minister said.

The resolution of the Gauteng Freeway Improvement Project has unlocked a project pipeline to the value of R85 billion for the non-toll network over the next three years.

The Minister said government is improving the capital budgeting process.

The Budget Facility for Infrastructure is being reconfigured into a centralized gateway for all large infrastructure projects that require fiscal support to advance.

From 2025, the facility will have a continuous evaluation process instead of one window per annum. The National Treasury will, in January 2025, publish a circular to guide the submission of proposals.

“Lastly, government is making a concerted effort to increase the pool of funders to diversify public infrastructure financing through new mechanisms and instruments,” the Minister said.

These include build-operate-transfer (BOT) structures and other concessions.

“We are developing a blended finance risk-sharing platform that includes a credit guarantee vehicle that will help de-risk public-sector projects while reducing government’s contingent liabilities. Fiscal support is proposed for the projects evaluated in the 2024 BFI window,” the Minister said.

This includes, but is not limited to: two hospital projects, including a district hospital in Limpopo; landside capacity expansions at the Cape Town Container Terminal; capacity upgrades on the rail network from Watloo to Gqeberha; rehabilitation of water infrastructure in eThekwini; and Student housing accommodation at six higher education institutions.

“A request for proposals will be issued this year for funders who are interested in supporting these projects, as well as projects for urban rail revitalisation, disaster relief and metropolitan trading services. Funding for these will be separated from broader sovereign borrowing and be accounted for separately,” the Minister said. - SAnews.gov.za

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Wed, 10/30/2024 - 14:49

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Revenue from tax collection to be lower than expected

Location: News

Revenue from tax collection to be lower than expected

Revenue from tax collection in 2024/25 is expected to be down by R22.3 billion from National Treasury’s estimations made in February this year.

This according to Finance Minister Enoch Godongwana who delivered the Medium Term Budget Policy Statement (MTBPS) speech in Parliament on Wednesday.

“Over the next two years, the main budget revenue estimate has also been lowered by R31.2 billion. In the absence of faster growth and in the face of external risks, tax revenue will remain under pressure, forcing us to make difficult decisions on where to spend.

“Lower revenue also means that we cannot, within the envelope, accommodate all of the demands on the fiscus. Difficult trade-offs, in all spheres of government, will have to be made.

“By sticking to our debt-reducing strategy and confronting these trade-offs, we can create the necessary conditions for a fast-growing economy that facilitates employment,” he said.

In the expanded MTBPS, National Treasury said it projects that SARS will collect some R2.3 trillion in tax by 2027/28.

“The tax-to-GDP [gross domestic product] ratio remains resilient and tax collections are expected to remain buoyant over the medium term. Tax revenues are projected to increase to R2.3 trillion, or 24.8% of GDP by 2027/28. Tax buoyancy increases to average 1.08 over the medium term, up from 0.95 in the current year,” the MTBPs stated.

Despite this, revenue collection is expected to decrease over the next few years.

“However, compared with the estimates set out in the 2024 Budget Review, which reflected a high level of energy imports, gross revenue collection is projected to fall short by R41.4 billion in 2025/26 and 2026/27. Improved tax revenues will require more sustainable economic growth and further gains in tax compliance and tax administration,” Treasury said.

Due to improved profitability outlook, the department said it expects corporate tax collections to rise over the next few years.

“However, slower renewable energy related imports associated with stabilising power supply have weakened import growth, resulting in lower import VAT collections. 

“Together with continued strong growth in VAT refund payments, net VAT collections are projected to fall short of 2024 Budget estimates. Under-collections in fuel levy receipts relative to 2024 Budget estimates flow through to the outer years,” the MTBPS said. – SAnews.gov.za

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Wed, 10/30/2024 - 14:49

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