Will MTBPS 2024 display greater political will to tackle corruption?

On Wednesday, Minister of Finance Enoch Godongwana will share with South Africans the Medium-Term Budget Policy Statement (MTBPS), which provides an update on our economic and financial position and compares our actual performance with budgeted projections.

This is also an event at which Minister Godongwana communicates adjustments to government’s spending because of changes to our economic situation or the reprioritising of spending to achieve revised objectives and areas of focus. The MTBPS will give us an indication of the Cabinet’s fiscal policy stance for the medium term (three years), along with decisions on tax policies and how the government plans to manage its debt.

What the MTBPS also does is provide civil society with a barometer of the government’s grip on managing its financial affairs and, more importantly, if and where there is an acknowledgement of and shift of attention to pressing needs addressing social justice and the stimulation of economic levers for employment growth.

This MTBPS will be the first section of the budget under the GNU, and it will be interesting to see if the new Cabinet has influenced a change in budget priorities.

OUTA hopes that Minister Godongwana will send a strong message that bailouts to non-core state-owned companies (like SAA, Denel, state mining companies, PetroSA and others) will not be tolerated. More importantly, however, it is our desire to see the reduction of budgets in unnecessary spending areas such as VIP protection for ministers and blue-light brigades and, instead, to see more funds assigned to the various sectors within the criminal justice system such as the National Prosecuting Authority (NPA), SAPS, Special Investigating Unit (SIU), SARS and institutions like the Public Protector and the Auditor-General.

Across all fronts and levels of responsible leadership in South Africa, the issue of corruption and organised crime is commonly regarded as a crisis and a hindrance to economic growth, and yet we don’t get a sense that government is prioritising the spending of our limited resources wisely enough to address this crisis.

Over the past five years, the NPA’s budget has not grown sufficiently enough to address its need, moving from R4.009 billion in 2019/20 to R5.889 billion in 2024/25.  While this is an increase of 47% over five years, this started from an extremely low base and the NPA faces a massive and complex workload with the entrenchment of corruption and the growth in organised crime. This is an entity which still needs rebuilding and strengthening with experts. The NPA underfunding becomes even more apparent when noting that its budget includes funding the Asset Forfeiture Unit (R824 million) and the Investigating Directorate (R939 million), key institutions in the battle against state capture and grand corruption. The NPA needs significant resources. We note that the VIP Protection Services receives R2.177 billion, which we believe is massively over-resourced at the expense of essentials such as the NPA.

The SIU limps along with just R450 million a year, but must provide professional forensic investigating and litigation services to all state institutions. In theory, those institutions pay for its services, however the reality is different. The Presidency spends more on administration (R533 million), and the Department of Mineral and Petroleum Resources spends massively more on Mining, Minerals and Energy Policy (R1.200 billion) despite the apparent ongoing failure of this policy.

The SAPS needs help, not necessarily more money although extra police on the street are always welcome, but a strategy for addressing the dysfunction that left South Africa with a police service utterly unable to respond to the July 2021 violence, and only slowly now starting to regard extortion – an aspect of organised crime – as a crime. This overhaul needs building into the medium-term strategy, and should include a strategy addressing the very expensive and failed Crime Intelligence unit (6 074 officers) and the well-padded Protection and Security Services (8 801 officers). Compare these staffing numbers to the SANDF’s Maritime Defence (5 870 staff) and Defence Intelligence (1 055 staff), or the NPA (6 618 staff).

The limited resources for the Public Protector, sends a clear message disrespect for the protection of the public from the abuse of authority. The Public Protector receives a miniscule R352 million, which means it is unable to increase its staff complement as it would like to do.

OUTA believes that for every R1 billion invested in effective rebuilding of structures that drive a concerted effort in the fight against corruption, we could see ten times that amount as a return in higher tax collections, in more excise duties by challenging illicit trading, and in improved business confidence which will result in the growth of tax revenue and employment.

“It makes so much sense for the Minister of Finance to beef up all areas that tackle improved transparency and accountability, in order to begin to restore social justice and grow the economy,” says Wayne Duvenage, OUTA CEO.

We hope to see more measured steps being taken to control the use of the equitable share grant funding to municipalities, with stricter consequences for failed service delivery, and ensuring that the funds don’t merely flow into the hands of corrupt syndicates.

We will be watching to see government’s progress on its promise in Budget 2024 to narrow the budget deficit, stabilise debt and, for the first time since 2008/09, achieve a primary budget surplus (with revenue exceeding non-interest expenditure) for this year.