Pretoria – Cabinet is working on reprioritising the budget to align it to the National Development Plan (NDP) and the Medium–Term Strategic Framework, says Minister in the Presidency for Planning, Monitoring and Evaluation, Jeff Radebe.
“National Treasury and the Department of Planning, Monitoring and Evaluation (DPME) presented their recommendations on work done in the past year to align the national budget to the NDP and the Medium-Term Strategic Framework,” Minister Radebe said.
Minister Radebe, who was speaking on Monday following a four-day Cabinet Lekgotla, said a joint team of the DPME and National Treasury has been at work since January this year.
Government has also identified a set of budget priorities for 2017/18 that focus on maintaining infrastructure spend, strengthening support for skills development and maintaining real levels of spending on the poor.
Work on identifying efficiencies and savings over the remainder of the MTEF will continue, said Minister Radebe.
At last week’s Cabinet Lekgotla, a summarised progress report on the implementation of the Medium Term Strategic Framework (MTSF) 2014-2019 was presented. The report concentrated on a review of key aspects of the MTSF to improve implementation in the next financial year.
“While acknowledging the work done to date on the Nine-Point Plan, it was also acknowledged that accelerated implementation is necessary to enhance economic growth,” said the Minister.
The Nine-Point Plan, which is aimed at growing the economy, was announced by President Jacob Zuma in his State of the Nation Address in February 2015.
Minister Radebe said the Lekgotla took place in the context of a continuing sub-optimal economic outlook, as well as the “ever-present” threat to the country’s sovereign credit ratings.
Earlier this year, President Zuma assigned Finance Minister Pravin Gordhan, together with representatives of labour and the private sector, to undertake a roadshow.
“[This is] because of our commitment to ensuring that we should do everything in our power not to have a credit downgrade. The reports from many rating agencies confirm that we are still on course because we have not changed our plans as announced in October 2015 by the Minister of Finance,” said Minister Radebe.
Global, domestic macro-economics
The Lekgotla deliberated on the global and domestic macro-economic analysis, with further proposals for economic and fiscal consolidation in the next year and beyond.
“Global recovery is still expected to strengthen but to a lesser degree than previously estimated as Brexit impacts unfavourably on global growth. Sub-Saharan Africa is reflecting challenging macroeconomic conditions as its major economies adjust to lower commodity process,” Minister Radebe said.
The Lekgotla noted that other risks include potential vulnerability in the Euro banking system, financial stability in emerging markets, geopolitical risks, climatic and health risks.
The medium-term framework sustains social gains in a weakening economic environment.
“Government remains committed to meeting its medium-term fiscal targets and will take additional steps to do so as conditions warrant,” said Minister Radebe.
Cabinet also resolved to initiate a national process towards the negotiation of a Social Compact between labour, business and government to stimulate economic growth and mitigate job losses.