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South Africa’s shopping list of essential requirements is significantly longer than its national budget can stretch. Finance Minister Enoch Godongwana is going to have to make hard choices.

The country presently faces a trio of existential crises: The collapse of stable electricity supply, extreme and widespread poverty, and disastrous weather events resulting from climate change.

The Minister must prioritise spending to mitigate these crises, while at the same time finding money to maintain and build new infrastructure, improve the education and health systems, fix public and freight transport, transform ghettoes into sustainable communities, reduce crime…. It’s a very long list.

Last week, food inflation hit a 14-year peak, with vegetables and crucial staples, such as maize meal and bread, reflecting the biggest increases. Millions of South Africans cannot provide for themselves and their families, and cannot afford to pay for essential services such as water and electricity.

Livelihoods, dignity, social cohesion

The state is obliged to provide citizens with the minimum needs to exist, but is failing to do so. This is a major contributor to the breakdown of the social fabric needed to build South Africa, and to the steepling crime rate.

The so-called social relief of distress grant, introduced during the pandemic, reaches around eight million people. But the R350 payouts fall far short of the R663 per person per month official food poverty line.

It is unacceptable that the most basic social needs of the most vulnerable members of our society are not being met – and an infringement on their constitutional rights.

The trajectory for South Africa of growing inequality and deepening poverty is unsustainable and elevates the risk of social incohesion.

Minister Godongwana would be wise to demonstrate the State’s consciousness of the importance of this matter by announcing plans and timeframes for the introduction of a Basic Income Grant. GOOD has conducted significant research proving that this is possible.

Eishkom!

Electricity failures are destroying businesses, compounding the unemployment crisis, and destroying the country’s reputation as an investment destination.

Last year, Minister Godongwana announced that National Treasury would finalize an agreement with Eskom to take over some of its +R400 billion debt. This would enable Eskom to invest money presently being used to fund its debt in transmission and new generation capacity. We need to hear an update on the process from the Minister.

We also need details on additional funding to purchase diesel. Dirty and expensive as it is, without guzzling diesel Eskom’s system could fail altogether.

Eskom is too important to fail. Rational financial assistance is imperative until additional and alternative electricity supplies are available.

Mitigating climate disaster

Strongly linked to energy are South Africa’s global commitments to reducing its carbon footprint.

The country has an abundance of coal, some of which will continue to generate electricity (at Kusile) until 2070, but the country cannot afford to renege on, or delay, its commitments to a just transition to renewable energy.

Minister Godongwana would do well to update the nation on the transition, and clarify the position with respect to grants and loans on offer by countries in the global north.

There have been indications that the Minister will outline government plans with respect to the large-scale rollout of rooftop solar panels. It will be interesting to hear how a tax incentive will achieve this, without leaving poorer citizens behind. A tax-incentive scheme will assist only those in the higher income brackets who can afford the upfront costs of retrofitting a solar energy scheme to their property. The State will have to go much further than a tax deduction if we are going to use the nation’s rooftops to drive a renewable energy programme based on solar power.

With the incidence of extreme weather events increasing, it would also be good to hear whether funds are being set aside to strengthen disaster response and management.

Issued by GOOD Secretary-General & Member of Parliament Brett Herron