The South African Budget – collaboration is key
In spite of indications that GDP growth is slowing from 3.1% in 2011 to an expected 2.7% in 2012, there is reason to be hopeful.
To date the South African economy has demonstrated remarkable resilience in the wake of the 2008 economic crisis and the Finance Minister’s budget has allocated much-needed capital to give it an extra boost. The new path being forged by the South African government as outlined in the budget speech is one of “modernising infrastructure, cultivating a vibrant emerging economy, improving quality of life, reducing poverty and creating employment opportunities.”
One of the key elements outlined in the budget speech by Minister of Finance Pravin Gordhan was the need for collaboration from “all of us, South Africans from all corners of this country.”
Etana is passionate and focused on the principle of collaboration, as demonstrated by our commitment to business insurance only through brokers. Furthermore, Etana has identified a number of key areas highlighted in the budget speech in which our eight Centres of Excellence (COEs) can leverage joint efforts and expertise as we head into 2012 and beyond.
While the global environment remains highly uncertain, South Africa has shifted its focus both inward and to emerging markets. In order to establish itself as a key economic hub on the African continent the budget is highly focused on investment in infrastructure. This investment, in turn, is set to drive beneficiation (crushing and separating ore to extract valuable elements) in the mining industry and to provide greater export opportunities for local commodities. With this in mind special emphasis is being given to “improving competitiveness in industry, investment in technology, encouragement of enterprise development and support for agriculture,” said the Minister.
Key investment areas outlined in the budget include:
- 43 major infrastructure projects – R3.2-trillion earmarked for expenditure
- R854-bn – total budgeted and approved spending on infrastructure projects for next three years
- R300-bn for energy
- R262-bn for transport and logistics
- R5.8-bn for improving manufacturing competitiveness
- R2.3-bn for industrial development and special economic zones
- R1.9-bn allocated to the Department of Agriculture, Forestry and Fisheries
Some of the mega-projects outlined in the budget:
- Durban-Free State-Gauteng logistics corridor.
- Eastern Cape: A major new south-eastern development node to “improve the industrial and agricultural development and export capacity of the Eastern Cape region.” The project will also improve logistical and economic links with the Northern Cape and KZN and includes the construction of a new dam on the Umzimvubu River.
- Limpopo: Integrate rail, road and water infrastructure in the Waterberg and Steelpoort regions to “unlock the enormous mineral belt of coal, platinum, palladium, chrome and other minerals” to boost mining and mineral beneficiation.
- North West: 10 priority roads will be upgraded and improvements will be made to water, rail and electricity infrastructure.
- West Coast: The “enormous potential” of the West Coast will be unlocked through major infrastructural developments such as the expansion of the iron-ore rail line between Sishen in the Northern Cape and Saldanha Bay in the Western Cape to extend transport capacity to 100-million tons a year.
Read more about the 2012 budget in the Independent Online.