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Provincial Budget 2016

Kevin Hustler, CEO of the Nelson Mandela Bay Business Chamber, comments on the Provincial Budget tabled by Finance MEC Sakhumzi Somyo in the Eastern Cape Provincial Legislature on 4 March 2016

Against the context of the tight business environment that we find ourselves in this year due to global and national economic conditions, we welcome Finance MEC Sakhumzi Somyo’s focus on greater austerity measures, as well as the driving of service delivery in the Eastern Cape.
Similar to our national wish list as the Nelson Mandela Bay Business Chamber, we wanted the Provincial Budget to focus on good governance on a local and provincial level to improve the service delivery of government to businesses in Nelson Mandela Bay.

MEC Somyo did succeed on this crucial matter to announce improved austerity measures for cutting back on expenditure in the provincial civil service. In particular we welcome his cost containment measures on wasteful expenditure and the containment of the provincial wage bill. It is imperative that the right people with the right skills should fill core programmes in the Departments of Health and Education, which yet again received the lion’s share of the Provincial Budget.

While we welcome Somyo’s focus on tight cash management, improved revenue generation and more rigorous expenditure management, we would want him to keep civil servants to his statement that this cost containment would not affect any core service delivery programmes.

Good governance and consequence management should remain the yardstick for overcoming the tough times in our economy.

We want more detail on:

• The process of restructuring and rationalising of provincial entities in the Eastern Cape.
• Greater transparency on local procurement for goods manufactured and supplied within the province.
• Clarity on the much talked about catalytic projects (The Oceans Economy and Renewable Energy Sector i.e. Thyspunt), so we can plan ahead to participate in the opportunities presented for local business.

Points of concern:

• The Department of Education received 45% of the total budget, despite the department failing our learners on a daily basis. We need a total overhaul of the education system in the Eastern Cape.
• While the R265 million over the medium term to mitigate the effects of drought in our province is welcomed, we want an allocation of this amount to commercial farmers in the province, since food security is critical for the people of our province.
• We welcome the money allocated to the Eastern Cape Parks and Tourism to grow tourism in our province, but we wish to see tangible implementable plans to grow tourism in partnership with the local tourism agencies.
• The transformation of IDZs to SEZs is welcomed with urgency to retain on capital invested and grow our export manufacturing base while creating employment. We need a suite of internationally competitive incentives to take these SEZ’s to the next level.
• We agree that an optimal road network is one of the key pillars for economic growth, as this is aligned to the Business Chamber key priorities. We welcome the investment in the provincial road infrastructure and construction by Sanral and the Eastern Cape government. We hope the upgrade of the Addo Road will be expedited.
• We welcome the amount of R155 million allocated to DEDEAT for SMME development over the medium term. We would like to see true partnership with organised business in the realm of SMME development.

Overall the Provincial Budget was found to be balanced but will need firm leadership and implementation urgency to deliver to the citizens of the province, during what is undoubtedly going to be a tough year ahead.