FROM THE DESK OF THE PRESIDENT
Monday, 02 March 2020
Dear Fellow South African,
The Budget presented by Finance Minister Tito Mboweni last week presents a sobering assessment of the state of our economy.
The figures make it plain that unless we act now to turn things around, there will be even more difficult times ahead.
Put simply, we are spending far more than we are earning.
As a result, we are borrowing more and more, and the cost of servicing that debt is rising. In fact, debt service costs are now the fastest-growing area of expenditure. We spend more on debt repayments than we do on health; only education and social development get more.
This position is precarious and unsustainable.
We need to make significant changes and we need to make them now.
There are several reasons for the position we’re now in. Our economy has not grown much over the last decade, mainly due to the 2008 global financial crisis and a decline in demand for the minerals that we export. As a result, revenue collection has been weak and we have had to borrow more to sustain spending on development, infrastructure and wages. At the same time, state capture and corruption has affected governance, operational effectiveness and financial sustainability at several public institutions, including state-owned enterprises (SOEs).
Efforts over the last two years to revive the economy and rebuild institutions have now been undermined by the electricity crisis, further constraining growth and placing an additional burden on public finances.
Our priorities in this budget therefore are to put the economy back on a path of growth, constrain public spending and stabilise our debt.
The budget is an integral part of our drive for inclusive growth, job creation, investment and a capable state.
We have made a deliberate decision not to pursue a path of austerity. Such a route would have seen deep cuts in spending on the social services that poor people rely on. It could have involved dramatically reducing the salaries of civil servants, the size of the public service, cutting bonuses and pensions, raising taxes and selling off key state assets.
An austerity budget would have damaged our growth prospects further and weakened the ability of the state to stimulate economic activity and meet people’s needs.
We have instead presented a budget that contains a range of balanced and well-considered measures to contain spending, increase revenue and encourage growth.
Over the next three years, we expect to achieve savings of around R261 billion by cutting the budgets of several departments and reducing the rate at which the public service wage bill increases. At the same time, however, we will need to spend more to support the restructuring of SOEs like Eskom and SAA. As a result, we expect a net reduction of R156 billion in non-interest spending over the medium term.
This will help to narrow the deficit and reduce our borrowing needs.
A large part of the savings will come from reducing the rate at which our wage bill grows. This will require focused discussions among all social partners, but particularly with public sector unions. These engagements need to be conducted in a spirit of seeking solutions. I am heartened by the willingness of all parties to engage in serious negotiations aimed at finding a solution.
Our approach is not to dramatically cut the size of the public service, but to examine the rate at which wages grow. Public service wages have on average increased at a much higher rate than inflation over many years, and we need to fix this if we are to get public finances under control. This also applies to the management of people’s personal finances, where if any expenditure item that rises at a rate more than inflation – be it electricity tariffs, mobile tariffs or food – will always put any individual person’s budget and finances under strain and out of kilter.
The wage bill remains the largest component of spending by economic classification. Growth in the wage bill has begun crowding out spending on capital projects for future growth and items that are critical for service delivery.
The public service wage bill is by no means the only area where we are cutting costs. I have decided that there will be no increase in the salaries of senior public office bearers this year. This follows a reduction in benefits stemming from changes to the Ministerial Handbook. We will publish a new law this year introducing a remuneration framework for public entities and state owned companies to prevent excessive pay for board members and executives.
Our trade union compatriots are right in saying that we should in a demonstrable way prevent leakages of public funds by addressing corruption, ending irregular, fruitless and wasteful expenditure. We will do this and much more.
As much as containing the public wage bill is critical to stabilising public finances, improving public sector performance is imperative if we want to build a more capable, efficient state. We need more of the right people in the right positions.
As we contain public spending, we are pursuing growth. It is for this reason that, despite the fiscal gap, there are no major tax increases. Instead, there is some relief for individual tax payers and several measures to broaden the corporate tax base. We are also pushing ahead with far-reaching reforms in areas like electricity provision, ports and rail and telecommunications to reduce the cost of doing business. Through the Infrastructure Fund we aim to mobilise financing from a range of sources to invest in a massive build programme. Through our industrial strategy and investment drive we are unlocking vital areas of growth.
We are fixing our public finances to make inclusive growth and job creation possible. Such times call for us to be realistic, not dogmatic. They call for cooperation, not conflict. Compromises and trade-offs will have to be made.
We are all in this together, and we share a collective responsibility to take the oars, to row in unison and steer our country through these stormy waters .
With best wishes,
President Cyril Ramaphosa
NICD KEEPS CLOSE WATCH ON CORONAVIRUS
While there has been no case of Coronavirus reported in South Africa, people who develop symptoms of respiratory illness during or after travel to countries where the outbreak is known to be circulating, have been advised to seek early medical care.
The National Institute for Communicable Diseases (NICD) on Monday, 24 February 2020, said it continued to monitor the rapidly evolving developments surrounding Coronavirus cases in several cities in China and other countries in South Asia, North America, Europe and Egypt.
Last week Thursday, the World Health Organisation (WHO) confirmed a case of Coronavirus in the Islamic Republic of Iran.
The NICD said its highly specialised team of experts, which is responsible for performing Coronavirus monitoring and testing for South Africa and a number of African countries, remained on alert for potential cases of the disease that may reach South Africa.
“Surveillance of the Coronavirus outbreak remains a key priority for South Africa, and we continue to intensify screening at all ports of entry, with a particular focus on our major airports of entry. Evidence continues to support this approach as the vast majority of cases are introduced into territories outside of China by air travellers,” the NICD said.
As of 21 February 2020, the NICD had tested 107 people for Coronavirus.
“The NICD can confirm that all results came back negative for SARS-CoV-2 and that South Africa has not had a case of COVID-19.”
The institute has advised people who develop symptoms of respiratory illness, including cough, fever and shortness of breath, either during or after travel to countries where Coronavirus is known to be circulating, to seek medical care early, and share information about travel history with their healthcare providers.
Source: SAnews.gov.za
UBUNTU AWARDS CELEBRATE EXCELLENCE IN DIPLOMACY
This year's awards were held under the theme: “Celebrating Excellence in Diplomacy – Working Together to Build a Better Africa and a Better World”.
President Cyril Ramaphosa on Saturday, 15 February 2020, delivered the keynote address at the annual Ubuntu Awards, hosted by the Department of International Relations and Cooperation (DIRCO) at the Cape Town International Convention Centre.
The purpose of the Ubuntu Awards is to recognise South African citizens for their distinguished service and contribution to promoting South Africa’s national interests and values across the world.
The event takes place traditionally after the Opening of Parliament and brings together captains of industry, civil-society leaders, members of Cabinet and other eminent persons in addition to ambassadors and high commissioners accredited to South Africa.
Among the 2020 winners were The Daily Show host and Grammy Award nominee, Trevor Noah, who was awarded the Ubuntu Arts and Cultural Diplomacy Award in the youth category for flying the South African flag high in his field of work.
World-celebrated musician Vusi Mahlasela, who is a SA Music Awards Lifetime Achievement recipient, was also a recipient of the Arts and Cultural Diplomacy Award in the veterans’ category.
Springboks assistant coach, Mzwandile Stick, received the Sports Diplomacy Award on behalf of the team. This after their Rugby World Cup triumph in Japan last year and for uniting the country behind the slogan “Stronger Together”.
The Ubuntu Lifetime Achievement Award went to Dr Brigalia Bam, a prominent gender activist.
Bam is the Chancellor of Walter Sisulu University, a former Chairperson of the Independent Electoral Commission and former General Secretary of the South African Council of Churches.
She was recently awarded the prestigious Mahatma Gandhi International Award for Peace and Reconciliation.
“What we are doing here this evening – celebrating excellence in diplomacy – aligns with our broader efforts to achieve these objectives, because conflict occurs only when diplomacy has collapsed.
“The various categories of these prestigious awards are indicative of the fact that successful diplomacy is an integrated effort, and one that draws together different activities, qualities and capabilities,” President Ramaphosa said.
President Ramaphosa thanked all the award winners and nominees for representing what he called “brand South Africa”.
“I would like to say thank you for flying the South African flag high. You have assumed the task, as you fly this flag high, you have taken into your hands the task of elevating what I would call ‘Brand South Africa’ in the community of nations.”
FROM THE DESK OF THE PRESIDENT
Monday, 24 February 2020
Dear Fellow South African,
The deliberations by Parliament on the National Health Insurance Bill are soon to enter a new phase as the Portfolio Committee on Health’s country-wide public hearings wrap up. These hearings, held in a number of places around the country, have shown that there is broad support for fundamental change in our health care system.
Participants have made a number of proposals and have spoken about their views on National Health Insurance (NHI), personal experiences of illness, trauma, disability and suffering – and the difficulties they have had in accessing health care when they need it.
It is these experiences that inform South Africa’s support for the global goal of universal health coverage. This goal has become a major aim for health reform in many countries and a priority objective of World Health Organization (WHO). It is instructive that WHO defines universal health coverage as a system that should ensure that all people have access to needed health services (including prevention, promotion, treatment, rehabilitation and palliation) of sufficient quality while ensuring that the use of these services does not expose the user to financial hardship.
It is one of the greatest travesties of our time that access to decent and quality health care services is determined by one’s ability to pay.
South Africa has two parallel health care systems. Around R250 billion is spent annually on less than 20% of the population. This is the section of our population that has access to private medical insurance. On the other hand our country spends R220 billion on rest of the population.
This flies in the face of the Constitutional right of access to health care for all citizens regardless of their socioeconomic circumstances. It is a situation that cannot continue. It is inefficient and unsustainable. It is unfair and unjust.
The introduction of National Health Insurance will be among the most far-reaching acts of social transformation this country has experienced since 1994. We have enough resources in this country to enable every man, woman and child to receive appropriate standardised quality health care.
Our past has taught us that we must never be a country that promotes the interests of the few at the expense of the majority. In 1713 the Dutch colonialists who had brought a smallpox epidemic to our shores imported medicines from Batavia to treat those affected. They used the medicine to treat their own, leaving the indigenous Khoisan to be decimated by the outbreak.
The segregation of health services brings back bitter memories. Back in the 18th Century it was on the basis of colonial settler status. Under apartheid it was on the basis of skin colour. Today it is on the basis of who can afford to pay.
The key fundamental principles underpinning NHI are equity, solidarity, the acceptance and recognition of the equal worth of every individual, as well as the right of everyone to receive the medical care they need cost effectively. This is something for which we must all fight.
The escalating cost of health care is affecting South Africans from all social strata where it hurts most – in their pockets. As the report of the Health Market Inquiry published last year has shown, even those who have private health insurance are buckling under the pressure of rising premiums and shrinking benefits. Out-of-pocket payments are on the increase, draining disposable incomes and making it even harder for many to make ends meet.
As a nation, a large share of our national expenditure goes to health care, yet there is a fundamental mismatch between what we spend and the health outcomes of our citizens. Just as we demand quality standards of health care for ourselves and our families, we should do the same for others. Just as we would not treat a relative or friend badly because they earn less than we do, we should care enough that they have equal access to treatment and care when they fall ill.
We must move away from a culture driven solely by self-interest and embrace the spirit of ubuntu, meaning solidarity. This is the vision of the NHI. It is the vision of our Constitution.
We cannot build a prosperous and economically thriving nation if a small minority of our workforce is healthy while the majority is vulnerable to ill-health and disease. In this respect, NHI is as much an economic issue as it is a fight for social justice.
I call on all South Africans to mobilise behind the National Health Insurance and to see it implemented. I call on NGOs, community organisations and civil society at large to rally around the NHI in the same way that they did in the fight against HIV/Aids.
I call on the National Department of Health to prepare adequately for the implementation of the NHI. This includes working with stakeholders to implement the Presidential Health Compact, ensuring that public health facilities have the personnel, medicines and equipment to provide the care that people need.
I call on the private sector to join government in seeing the NHI realised. To transform the health care landscape to make it more efficient, cost-effective and value for money requires that we forge strong public-private partnerships for the delivery of services. We remain committed to ensuring there is effective consultation and engagement with all sector partners at all stages of the process.
We will not be reckless in implementing the NHI. We will implement it in an incremental fashion and aim to cover the whole country by 2025. We will use an affordable approach to progressively move towards a comprehensive NHI environment.
I ask every citizen reading this to join us. It is in your interest that universal health care becomes a reality. It is in the interest of your family, your community and your children.
It is in the interests of a free, equal and prosperous future for all.
With best wishes,
President Cyril RAMAPHOSA
FROM THE DESK OF THE PRESIDENT
Monday, 17 February 2020
Dear Fellow South African,
Engaging with young people always leaves me energised. It is exciting to gain insight into their struggles and triumphs and their vision for what can be done to improve this country.
There is no denying that youth are a significant presence in our nation’s psyche and fabric.
Far from the perception that they are complacent, politically apathetic or self-absorbed, local and international studies consistently affirm that young people around the globe are always more positive about their prospects.
According to the findings of an Ipsos Pulse of the People poll released last month, 61% of South Africans aged 15 to 17 feel optimistic about 2020.
I have no doubt this is a sentiment shared by youth in general and especially the cohort born at the turn of the millennium who are now beginning their adult life, the ones the youth call Ama2000.
They are the sons and daughters born after democracy. While they have no direct experience of the atrocities of apartheid, they continue to live with its legacy of racial inequity, spatial injustice and poverty. These young people are confident, self-assured and brimming with ambition. They know their rights and aren’t afraid to demand them.
Our country’s youth represent energy, hope, fun, potential, future and freedom.
They are digital natives fluent in the use of modern technologies and look to enter careers that did not even exist at the time of their parents.
On the eve of the State of the Nation Address last week I had the privilege of interacting with a group of such dynamic young people at an intergenerational dialogue convened by the National Youth Development Agency.
We discussed the issues that are most important to young people and examined ways in which we could align our perspectives and actions.
Naturally, access to employment and opportunities dominated the agenda. Of the 1.2 million young people entering the labour market each year, almost two-thirds remain neither working nor studying.
The participants in the dialogue welcomed the fact that the issue of youth employment was receiving attention at the highest levels of government. But the refrain was familiar: they were ready and able to contribute to the economy in various ways, including as entrepreneurs, but bureaucratic red tape and lack of funding prevents them from doing so.
As Bright Hlongwane from Youth in Business South Africa told me, there needs to be more funding extended to young entrepreneurs. They would like to see a variety of financial institutions, developmental financial institutions, angel investors, private equity firms as well as commercial banks extending credit and taking a bet on young entrepreneurs.
For our country to prosper and thrive we must do all within our means to ensure young people can participate in our economy in a meaningful way, whether it is in formal employment or self-employment.
It was therefore fitting that I could use this platform to launch the Presidential Youth Employment Intervention, which is a strategic national vision and plan which sets out priority actions to address youth unemployment.
This includes a national pathway management network that matches candidates with work opportunities. This will enable young people to have access to opportunities as some of them do not have the networks that make easy access to opportunities possible.
Specialised short focused courses in skills that employers need now will be organised. This aims to address the problem of a mismatch between the existing educational, training and development programmes and the requirements of the economy.
We welcome the work already being done in this area, such as the programme currently underway through the departments of Agriculture, Land Reform and Rural Development and Cooperative Governance and Traditional Affairs to train 1,000 young students in the Free State in agricultural and other skills.
Many young people want to start their own businesses. They lack the technical skills that can help them start their own businesses. The intervention will support the growth of youth entrepreneurs. Entrepreneurship is certainly not a panacea, but I am convinced that it is one effective and proven way to confer identity and purpose, a sense of belonging, and hope for the future for the youth.
The Presidential Youth Service Programme provides opportunities for young people to give back to their communities. This initiative is designed to effect change and make an impact at scale, as opposed to fragmented programmes that have had limited impact.
I also announced in the State of the Nation Address that we will set aside 1% of the national budget for a youth employment initiative. A number of programmes and projects are being designed to address this national challenge.
The youth of our country clearly see this as a land of opportunity and promise, despite the obstacles they encounter. In the past week alone I have met several young South Africans who make me proud of just how far we have come and what we have achieved.
There are young sports people like golfing prodigy Sim ‘Tiger’ Tshabalala who is racking up international golfing awards at the tender age of 8. He is ranked 7th in the world in his age group and has won the US Kids golf tournament twice. My spirits were lifted when Grade 11 learner Sinoyolo Qumba from Orange Farm wrote to me about what should be in this year’s SONA . She actually joined our speechwriting team in the drafting process. There are passionate activists like Ayakha Melithafa from Eerste Rivier in the Western Cape, who attended this year’s World Economic Forum in Davos to call on world leaders to stand firmly for climate justice. I was bowled over when I met Michelle Nkamankeng who, at 11 years old, is Africa’s youngest author and is ranked among the top ten youngest writers in the world. The author of seven books and wrote her first book at the age of 6 years old. As Professor Jonathan Jansen said: “She is confident, articulate, insightful and passionate.”
It is these young people who are the real jewels of our country’s future and who remind us that our freedom was won through the sacrifices of the young men and women who were determined that not only they, but those who came after, should live in the light of freedom.
We must continue to work together as government, business, labour and civil society to ensure that the burden of unemployment does not continue to weigh down our young people, crush their spirits and cause them to become despondent. I am confident that the actions we outlined in the SONA will represent a new frontier for youth development
As Frantz Fanon said, it is to each generation to discover its mission. This generation has discovered theirs. It is now up to us to support them to fulfil it. It is a historical fact that a nation’s failure to successfully nurture and enhance the capabilities of its youth spells doom for the future of that country.
With best wishes,
President Cyril RAMAPHOSA