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Finance Minister Enoch Godongwana presented a budget that supports and reinforces the programme of action announced in the State of the Nation Address (SoNA) to grow the economy and create jobs, says President Cyril Ramaphosa in a February 28 newsletter.

The budget provides details on how government plans to raise money and where it is going to spend that money to improve the lives of South Africans.

“Recognising the importance of basic services for quality of life and for investment and business activity, the budget significantly increases the allocation for service delivery. For example, it adds an extra R30.7-billion to local government allocations for basic municipal services,” says Ramaphosa.

The pandemic battered the economy and further worsened the country’s financial position. At its height, less revenue was collected and more money spent on strengthening health response and providing social support. As a result, the country had to borrow more and at a greater cost, he notes.

Despite the substantial economic and social support packages introduced in 2020, businesses have gone under and as many as two-million people have lost their jobs. Many households have been spared from hunger only owing to the increases in social grants.

“The only way out of this dire situation is to grow the economy. And the most effective way to reduce poverty and hunger in a sustainable way is to create employment,” Ramaphosa says.

“This programme includes far-reaching economic reforms that promote investment and growth. These reforms will ensure that our country has enough affordable electricity to meet growing demand, that our ports and rail lines are more efficient, that we improve access to faster, cheaper broadband, that homes and businesses have the water they need, and that we can attract the skills and investment we need to create a productive and dynamic economy.”

At a time when public resources are constrained, these reforms will enable greater private investment in the vital infrastructure that the economy needs to grow. This takes place alongside a revised framework for public-private partnerships and innovative new ways to blend public and private resources for infrastructure investment, says Ramaphosa.

“We will do this in a way that improves the performance and financial position of key State-owned enterprises. This will place these enterprises in a far better position to fulfil their developmental mandates, while ensuring that critical national infrastructure remains firmly in State hands.”

To support this work, R17.5-billion was allocated in the budget for catalytic infrastructure projects over the next three years. This will, besides others, support the upgrading of roads, bridges, water and sewer infrastructure, transport, schools, hospitals and clinics, he illustrates.

The budget supports the efforts announced in SoNA to unleash the potential of small, micro and informal businesses.

For example, R15-billion has been set aside for a redesigned loan guarantee scheme that will make it easier for small businesses to access funding to bounce back from the effects of the pandemic.

Further, the Employment Tax Incentive, which has been so successful in giving many young people their first jobs, is being expanded to encourage small businesses to hire more people, he adds.

All of these measures encourage the growth and expansion of firms and support the establishment of new firms to create new jobs. These efforts will, however, take time to absorb the millions of South Africans looking for work, he says.

“We have, therefore, extended the Presidential Employment Stimulus, which has provided work and livelihood opportunities to more than 800 000 people in its first 16 months. An additional R18.4-billion has been allocated over the next two years so that the stimulus can continue to provide vital income, skills development and work experience to hundreds of thousands of unemployed, mostly young, people.”

Meanwhile, the budget also supp...

The Constitutional Court has ruled against public sector trade unions in their bid to force government to honour a wage agreement for 2020, siding with the Labour Appeal Court which found that the agreement was unlawful.

At stake was R75.6-billion in backpay, which unions had hoped the court would order must be paid as well as a higher salary baseline going forward.

For Treasury and Finance Minister Enoch Godongwana the ruling will come as a relief. Had the court ruled against government, the budget framework – tabled only last week – would have been thrown into disarray with an obligation on government to both pay backpay for two years and raise the wage bill for the next three years by a baseline of R37.8-billion.

The Constitutional Court found that as the wage increase had not been budgeted for and Treasury had indicated this to the state’s representatives during the bargaining process, the agreement was unlawful.

The outcome means that public servants' wages have been frozen for two years. In 2021, they received a R1 000 a month cash gratuity as a sweetener. But this amount has not been included in pensionable salaries.

Political parties were the biggest winner in this week’s budget with a 30% hike in funding allocations.

Between them, political parties represented in Parliament got R166-million from taxpayers in 2021/22. Over the next three years, this will grow by an average of 30% rising to R342-million this year and R366-million in the final year of the three-year budget framework.

The move is in line with reforms to party funding, introduced when the Political Party Funding Act came into force last year. The Act requires that no single donor fund any one party by more than R15-million a year and requires public disclosure for all donations in cash or kind above R100 000.

As it was anticipated that this would make some donors reluctant to donate money, the quid pro quo when the Act was processed in Parliament was the fiscus would increase support to political parties.

The African National Congress (ANC) has been particularly hard-hit by the new requirements as it has relied on donations from businesspeople and companies that have scored large, often inflated, government tenders.

That this was often corrupt, was laid bare in evidence at the Zondo Commission where tenderpreneurs, who had amassed enormous wealth from government contracts, spoke about their largesse to politicians and to the ANC.

Former Cabinet minister and constitutional negotiator Valli Moosa - who was the architect of the Political Party Funding Act - said that greater support from the fiscus was always part of the deal.

"The understanding was to get parties to depend more on state funding than on business, so that they are less beholden to individuals with money," Moosa said on Friday.

More money needed

He believes, though, that the amounts allocated are still not sufficient to reduce corruption.

"They should have allocated more. Political parties can’t survive on that. As long as the taxpayer does not fund political parties, they will have no choice but to scrounge around for money," he said.

The money, which will sit in the Represented Political Parties Fund, is administered by Electoral Commission of SA. A third is allocated equitably to all parties with seats in the National Assembly or provincial legislatures.

The remainder is distributed proportionally according to a party’s size. Parties without representation in national and provincial legislatures – such as Herman Mashaba’s Action SA – do not receive funding.

1/3 equal (33.3%): A third is allocated equitably to all parties that hold seats in the National Assembly or any provincial legislature;

2/3 proportional (66.6%): Two thirds allocated in proportion to seats held by a political party in the National Assembly or provincial legislatures.

The funding is distributed quarterly.

Gauteng Premier David Makhura wants to be remembered for changing the economic geography and the demographics in the province.

His tenure as premier comes to an end in 2024.

Speaking to News24, Makhura said ensuring the province's economy was not centralised in one metro or one region was his administration's top priority, and it would continue to be a priority until 2024.

The premier added that he would love to be remembered for ensuring there was "genuine economic participation by the black demographic".

He said that, under his administration which took over in 2014, Gauteng had ensured that it established number of Special Economic Zones (SEZs), which are geographically designated areas set aside for specifically targeted economic activities.

"We [his administration] have ensured that there is not just one SEZ in this province, but an integrated network of SEZs that have truly revitalised innovation and manufacturing, and brought on board especially black business and black talent.

"We are trying to decentralise and take new centres of the economy to those areas in Gauteng where the employment is dependent on one sector or two sectors," said Makhura.

Last week, Makhura told New24 that he would not be running for African National Congress (ANC) chairperson in June.

He would also not be seeking another term as Gauteng premier, but would use the next two years left of his premiership to forge unity within the ANC in the province.

He wants the party to go into the 2024 national government elections united and able to compete with other opposition parties that have been eating at their support base.

Makhura won't run for the national secretary-general position, but has not dismissed the possibility of contesting for other ANC top six positions.

Makhura became premier in May 2014, taking over from Nomvula Mokonyane.

He has been the head of the province's administration in various capacities for 22 years.

Makhura was brought into Gauteng in 2000, initially for a year, as a coordinator to rebuild and stabilise the province.

After that one year, he was elected provincial secretary for 13 years - and then spent four years as the deputy chairperson.

President Cyril Ramaphosa has admitted that "diplomacy has failed" in dealing with the escalating Ukraine-Russia crisis – but is adamant that the situation can still be salvaged through mediation by the United Nations (UN) Security Council.

"Clearly diplomacy has failed, but mediation and further engagement is the only way out. There’s no other way out of this conflict," Ramaphosa said on Friday.

Speaking at the Intergovernmental National Litigation Forum in Pretoria, Ramaphosa said it was "not necessary for people to die" and for property to be destroyed when the option of mediation was available.

"I call upon the United Nations Security Council to do their mediation work and if there ever was a time in the world when the United Nations Security Council is to come into its own, this is the time when they must all put their heads together and resolve this conflict so that this war stops," he told the media after that address.

In response to questions from News24 about whether mediation by the UN Security Council was an option, given that it was chaired by a Russian representative, Ramaphosa replied, "It is possible, because even as Russia is chairing, they should still be able to solicit a meeting to happen so that the matter can be discussed," he said, before confirming that South Africa was "on the way" to "getting a discussion going with Russia and the United States".

He confirmed that NATO representatives had sought to engage with him, but gave no further details.

South African Institute of International Affairs (SAIIA) chief executive Elizabeth Sidiropoulos warned on Wednesday that geopolitical ruptures may make the Brazil, Russia, India, China and South Africa, or BRICS, economic grouping's chances of addressing systemic and existential challenges in the next decade extremely difficult.

Rising geopolitical tensions in Europe were the biggest challenge, she said.

Tensions between Russian and Ukraine have been escalating since 2014 and are creating precedents of sovereign countries determining the borders of other sovereign countries.

Russia has sent troops into Ukraine, prompting countries to impose sanctions on Russia.

South Africa, as a BRICS member, is yet to comment on the conflict.

“To say that we cannot afford geopolitical tensions at a time of significant global developmental challenges, climate and sustainable development targets that we have to reach by 2030 may be quite trite, but such geopolitical ruptures may very well make our chances of addressing systemic and existential challenges in the next decade extremely difficult, not just for South Africa but for the world,” said Sidiropoulos.

She added that for a country like South Africa, which faces significant developmental challenges, how it mobilises and participates in groupings, such as BRICS, to help it realise its developmental agenda, is critical.

There will be no increase in either the general fuel levy or the Road Accident Fund (RAF) levy in 2022/23.

The National Treasury has, instead, turned its focus to providing an overall R5.2-billion in tax relief, in support of households and the economy.

Fuel prices in South Africa exceeded R20 a litre for inland unleaded petrol for the first time in December 2021 owing to higher crude oil prices and exchange rate depreciation.

Finance Minister Enoch Gondongwana said on February 23 that the higher prices had put pressure on the cost of transport, food and other goods and services.

The general fuel levy stands at R3.85 per litre of petrol and R3.70 per litre of diesel, while the RAF levy is currently R2.18 per litre of petrol and diesel.

Godongwana explained that, to support consumers and the economic recovery, no increases will be made to the general fuel levy on petrol and diesel for 2022/23, providing tax relief of R3.5-billion.

In combination with the zero increase in RAF levy, these changes will ensure that fuel taxes as a percentage of the price of fuel are below 40%.

The last time that the fuel price was not increased due to a change in either the general fuel levy or the RAF levy was in 1990.

Godongwana said a review of all aspects of the fuel price was needed and, to this end, teams have begun to engage on this critical work.

In 2021/22, taxes accounted for on average 34% of the price of petrol and 38% of the price of diesel – a ratio that is below that of India and Mexico, and far lower than the 60% that is common in Europe.

The fuel levy remains unchanged in 2022/23; however, due to expected growth in fuel sales volumes, government revenue is expected to increase at an average annual rate of 1.3%, from R44.7-billion in 2021/22 to R46.5-billion in 2024/25.

The Gauteng High Court in Pretoria has granted the State Capture Inquiry another two months to complete its work – and President Cyril Ramaphosa will have four months to respond to the final part of the inquiry's report.

In court papers, Acting Chief Justice Raymond Zondo, who chairs the inquiry, said he expected to hand over the final part of the report, including findings relating to Eskom, Bosasa and the State Security Agency, to Ramaphosa at the end of February.

The estimated 1 500-page document was likely to contain reports on the Free State, the "attempted capture of National Treasury" and the Passenger Rail Agency of SA (Prasa).

But, he made it clear that the final volume of the commission's report, which would have been delivered to Ramaphosa on 28 February, "will not make the report complete" - a reality that he took full responsibility for.

According to a list of topics provided by Zondo, the final part of the report would address "the closure of the Gupta bank accounts and the Cabinet response", the Estina Dairy Project, "parliamentary oversight", the SABC and ANN7, EOH and the City of Johannesburg and "The Big Picture".

The final part of the report will be released on 30 April.

Ramaphosa also asked for more time to prepare his written submission to Parliament on his implementation plan in response to the report, as he had previously been ordered to do by the High Court.

He had initially been granted an order to submit the final report to Parliament and act on it within four months from 28 February, meaning that his four months would have ended on 30 June.

But after learning that Zondo had approached the court for an extension, Ramaphosa launched his own application on Sunday, in which he asked for a new date in line with Zondo's new 30 April deadline for the final part of the report.

In an urgent hearing that was decided on Wednesday morning, the High Court granted the orders that Zondo and Ramaphosa sought.

Gauteng deputy police commissioner Major General Daniel Mthombeni said he received no intelligence on the violence that gripped the province in July last year.

He testified on Tuesday on the second day of the Gauteng leg of the South African Human Rights Commission's hearings into the July unrest.

Mthombeni said while Gauteng police had no intelligence on the July unrest, they had received information ahead of the Constitutional Court judgment sending former president Jacob Zuma to prison.

Last year, the Constitutional Court ruled that Zuma had to go to prison for not appearing before the State Capture Inquiry. Immediately after his incarceration, violence broke out in Gauteng and KwaZulu-Natal, resulting in more than 300 deaths.

At the time of the unrest, Mthombeni was the acting provincial police commissioner because Lieutenant General Elias Mawela was on sick leave.

On Tuesday, Mthombeni's testimony was similar to that of Mawela, who earlier told the commission he had received no intelligence on the violence in Gauteng and KwaZulu-Natal.

"There was no formal intelligence report that I received," Mthombeni said.

He said despite monthly meetings to discuss security in the province, there was no warning about the unrest. But they received one related to the Constitutional Court decision on Zuma.

"[With regards to] early warning, one did not receive it prior to the unrest in Gauteng. The essence of the matter is that the intelligence related to the Constitutional Court hearing; we, as a province, received that. The ruling was supposed to be made at ConCourt, and we put a plan [in place]. We established a joint operations centre within that area.

"That one we planned and executed perfectly. There was information related to the ConCourt judgment given to us."

On why he hadn't received any information on the unrest, Mthombeni said: "I wouldn't know because the intelligence has to be gathered. Maybe it was a lack of gathering by people on the ground. Truly, it was not sent to me prior the public unrest."

He said there had been informal indicators of looming violence.

"Some of the information about the instigators I got from the premier of Gauteng [David Makhura]. I had to link up to the intelligence system, and it was successful."

Mthombeni said Makhura had provided him with information on a video by former radio DJ Ngizwe Mchunu.

Mchunu has been charged with inciting public violence and contravening the Disaster Management Act. He is alleged to have incited violence during a briefing at a Bryanston hotel on 11 July, just days after Zuma's arrest.

On Monday, Police Minister Bheki Cele testified that he received information on the 12 alleged instigators from a member of the public.

Some of the alleged social media accounts included that of Twitter user "Sphithiphithi Evaluator", who has since been unmasked in court as Zamaswazi Majozi.

She was arrested last year and charged with incitement to commit violence.

The violence started in KwaZulu-Natal before spreading to Gauteng. The commission asked Mthombeni on Tuesday why the province had not been better prepared.

"We tried what we could under those circumstances. We also tried to make sure that people who . were committing the crimes were arrested. The collaborations we had with the community, taxi associations . it could have been worse," he said.

In arguing there is no validity to the State's case against him, suspended African National Congress secretary-general Ace Magashule's legal representative claimed on Tuesday his arrest was influenced by President Cyril Ramaphosa.

Representing Magashule, advocate Laurence Hodes characterised the case as "politically motivated and unsustainable".

He urged the court not to "condone" the charges and instead dismiss them.

"In a matter that is so obviously politically inspired, Your Ladyship should not uphold the prosecution's clear attempts to be partisan in their prosecution," argued Hodes.

He said the timing of the arrest and prosecution was "extremely sinister".

This was further elaborated on in Magashule's heads of argument in which he stated the "President [Ramaphosa] wields influence throughout the Republic of South Africa, including the NPA [National Prosecuting Authority]".

As such, he argued, "it was only after Ramaphosa's renewed vigour concerning the step-aside rule on about August 2020" that he was suddenly arrested on 3 November 2020.

The embattled secretary-general conceded the allegation of ulterior purpose and political interference motivating his corruption case might appear "shadowy and nebulous" and "inconsistent with the pleaded facts as per his founding affidavit", but there was still merit to concluding Ramaphosa might have influenced the charges.

The heads of argument reiterated it was only after Ramaphosa having expressed a renewed vigour concerning the implementation of the party's step-aside rule that Magashule was arrested.

"This does not appear to be a coincidence," argued Magashule.

Hodes said what was more perplexing was the State made the arrest and hauled his client before the court when it was clearly not ready to prosecute the case with was contrary to the country's laws.

He argued Magashule was never afforded the opportunity to explain the charges against him, which amounted to yet another contravention of his client's rights.

Magashule made the point in his heads of argument it was Ramaphosa who might have pressured the NPA to act against him so as to have a case for him to step aside from the powerful secretary-general position.

Magashule's heads of argument also noted there was "prosecutorial misconduct" in his client's case and it had further concerns he was implicated by another politician, current Free State co-ordinator Mxolisi Dukoana.

"This should raise eyebrows immediately and should demonstrate the political interference," said Hodes.

Prosecutor advocate Naseer Cassim said Magashule and his legal representatives did not properly read the docket and if they did, they would have realised there was a prima facie case against the suspended secretary-general.

Cassim added the buck stopped with Magashule as the premier of the province, and he had to answer as to why a contract for about R20 million ended up costing the province R255-million.

He said Magashule had failed to report a crime.

Judgment was reserved in the case.