Picture: Phando Jikelo/African News Agency (ANA) – Minister of Finance Enoch Godongwana delivers the 2022 Budget speech at the Goodhope Chambers, in Cape Town, on February 23. Will Godongwana’s 2023 Budget show signs of visionary clarity, asks the writer.
By Trevor Ngwane
“South Africa is on the road to economic recovery; the world recognises that. We have a long way to go, and the economic outlook is fraught with risks and uncertainties,” said Minister of Finance Enoch Godongwana during his visit to the World Economic Forum in Davos, Switzerland, earlier this year.
His realistic optimism might be misplaced as he faces the prospect of delivering what could be a penultimate Budget speech before the sky falls on his party, the ANC.
National elections are due to be held in May next year, exactly 30 years since the ANC took power under the leadership of Nelson Mandela. Many people believe that the voters will put the ANC to the sword after three decades of arguably disastrous leadership and governance of the country. Electoral anxieties abound among ANC leaders including its president, Cyril Ramaphosa.
It is sometimes said that when a condemned man faces the gallows, he suddenly acquires an acute clarity. Will Godongwana’s Budget speech on Wednesday show signs of visionary clarity? Will his numbers help the ANC regain its authority and popularity among the masses?
“Politics is the most concentrated expression of economics, its generalisation and its culmination,” wrote Vladimir Lenin, the leader of the 1917 Russian Revolution. Under modern capitalism, a socio-economic order driven by class struggle, the Budget is a battlefield where the classes line up against each other, fighting to get the greatest share of the national wealth.
On the one hand, there is the capitalist class with its riches and privileges intent on hanging on to and extending its power. On the other hand, there is the working class who is struggling to improve its lot while faced with exploitation and oppression by the ruling class.
The crisis of the ANC, as a political party, government and movement, is that its failures have turned substantial sections of all classes against it. The deep aversion has crystallised around its association with and perceived culpability for the energy crisis. Hobnobbing with the rich and powerful global elite in Davos did not spare Godongwana the embarrassment of being asked pointed questions about how his government planned to overcome the crisis.
CNN news anchor Richard Quest recently visited the country and was dismayed by the rolling power cuts which he refused to call loadshedding, finding the term a ridiculous euphemism. Like Houdini, the famous escape artist, Godongwana must miraculously present a Budget that takes the ANC government out of the deep hole it has dug itself in, and timeously to avert being politically obliterated in the coming elections.
In his State of the Nation Address delivered more than a week ago, President Cyril Ramaphosa listed some of the fiscal tricks Godongwana must perform. He must bail out Eskom to the tune of about R200 billion, thus helping it reduce its R400bn debt. “Eventually, in the next 12 to 18 months, we will be able to say load shedding is a thing of the past,” he told the Davos crowd.
The working class and the poor, including other classes, are in crisis and cannot cope with the rocketing cost of living. In December, consumer inflation was 7.2 percent and dropped to 6.9 percent last month. However, food inflation climbed to 13.4 percent, the highest its been in 14 years. The increases in the price of meat, vegetables, cereals and other food items has been relentless. According to Mervyn Abrahams, the programme co-ordinator at the Pietermaritzburg Economic Justice and Dignity research unit, the price of a food basket for the working class far exceeds the minimum wage and other sources of income. Lack of nutrition has led to 25 percent of children having stunted growth in South Africa. Despite resistance by mainstream bourgeois economists, Ramaphosa announced the extension of the Social Relief for Distress grant. It is ironic that the arguably tokenistic R350 a month does make a difference given the economic desperation millions of people find themselves in.
However, he was cagey about the universal basic income grant, talking about the development of a “targeted basic income for the most vulnerable” which means it will be neither universal nor unconditional. Furthermore, this must be done “within our fiscal constraints”, a code phrase for austerity underpinning budget cuts to healthcare, education, welfare and all the services that poor people depend on.
Austerity is behind Godongwana’s refusal to pay public sector workers a living wage. Last year, he unilaterally gave a 3 percent increase which all the unions rejected on economic and collective bargaining procedural grounds. The unions will present him with a strike notice on Budget Day because it is he who must loosen the purse strings that can help build an efficient and well-resourced public sector that provides adequate services for all.
Now is the time to force the hand of a government that has failed the working class and the poor. The sinking ANC must do good by those whose struggle put it in power.
Trevor Ngwane – Director of the Centre for Sociological Research and Practice, University of Johannesburg