28 February 2013
Brand South Africa has welcomed the importance placed on South Africa’s National Development Plan in the 2013 National Budget, reflected both in increased health and education spending and in incentives to grow youth employment and boost local investment and regional trade.
Delivering his Budget speech in Parliament in Cape Town on Wednesday, Gordhan identified the National Development Plan (NDP) as a key pillar of the government’s spending plans, saying: “The NDP will be implemented by government and budgets will be aligned to it.”
The NDP is a a blueprint for eliminating poverty and reducing inequality in South Africa by 2030. It seeks to do this by drawing on the energies of the the country’s people, growing an inclusive economy, enhancing the capacity of the state, and promoting leadership and partnerships throughout society.
President Jacob Zuma, interviewed on national television following his State of the Nation Address earlier this month, said the NDP was a crucial policy-making tool that would help South Africa develop and determine the direction the country was to take. The plan was approved by Cabinet late last year.
Addressing socio-economic priorities
Brand South Africa CEO Miller Matola noted that Gordhan’s Budget addressed key socio-economic priorities as envisaged in the NDP, including increased spending on education and health care, as well as a proposed employment tax incentive for young, first-time workers and several tax incentives for businesses that invested in the country’s Special Economic Zones (SEZs).
Brand South Africa also welcomed Gordhan’s announcement that R827-billion in state financing was in place for South Africa’s infrastructure projects over the next three years, saying this would serve to “encourage business to keep investing in our economy and seize the opportunities around us.
“As a developing country, South Africa requires investment in critical infrastructure projects that will have a catalytic impact on the economy,” the agency said in a statement.
Of this R827-billion, Gordhan said that R430-billion would be spent on building schools, hospitals, clinics, dams, laying out water and sanitation projects, supplying electricity to over a million new homes, building more courtrooms and prisons and constructing better bus, commuter rail and road links.
‘Gateway to Africa’ reforms
Brand South Africa also noted the increase in the budget for South Africa’s police services and criminal justice system, saying this recognised “the rights of South Africans to access efficient and well-resourced criminal justice services in accordance with the Constitution”.
According to the Budget Review, the Department of Police will receive R2.5-billion over the next three years to improve the country’s detective and forensic capability, while the Department of Justice will receive R1.2-billion for its court revamp and modernisation programme.
Matola also welcomed the outward investment reforms, forming part of a new set of “gateway to Africa” reforms, announced by Gordhan on Wednesday.
These include the relaxation of cross-border financial regulations and tax requirements on companies in South Africa, as well as reforms making it easier for banks and other financial institutions in South Africa to invest and operate in other countries.
Matola said this was in line with the NDP, which acknowledges the global shift of economic power from West to East, while also highlighting the rise of Africa. “This is an important step to enabling trade and supporting regional integration,” Matola said.