President Jacob Zuma in his State of the Nation Address had inspired us to begin telling the good story we have as a nation. It is a story of how, working together, we have built a country that is today a much better place to live in than it was before 1994.
While we have recorded many successes across a range of areas, the story of how we have transformed our economy is nothing short of remarkable. The economy we inherited at the end of apartheid was structured to meet the needs of only a selected few.
It was technically bankrupt and chronic high inflation had driven up costs. The living standards of black citizens remained dangerously low while those of many white citizens had also begun to decline.
The apartheid economy recorded negligible growth, a gaping budget deficit of - 9.3 per cent had developed and public sector debt amounted to 64 per cent of gross domestic product.
In 1994 the new democratic government began a process to transform the economy to undo the deep rooted structural unemployment and inequality from the long term effects of apartheid’s distorted policies.
Last year international investment bank Goldman Sachs lauded South Africa’s economic advances; it noted that South Africa, on almost all accounts, is better off than it was in 1994.
Its report “Two Decades of Freedom” highlighted that gross domestic product had almost tripled from $136 billion to $385 billion and inflation decreased from 14 per cent before 1994 to an average of 6 per cent.
The economy has been deracialised and the black middle class had tripled. Today South Africa has created a more inclusive economy that seeks to address the needs of all 51 million South Africans.
No other developing country of a similar size can claim to have accomplished what we have in such a relatively short period. It is only the perpetual SA detractors who still disagree with us when we say South Africa is a much better place to live in now than it was in 1994.
While unemployment and inequality have not fallen to the levels we would have liked, government is confident that the plans it has put in place will help turn the situation around.
Delivering his 2014 Budget Speech, Finance Minister Pravin Gordhan reaffirmed our strong focus to job creation through our commitment to fund 6 million job opportunities over the next five years. Over the last five years government has spent more than R100 billion on employment programmes and funded more than 4 million job opportunities.
This year government introduced the youth employment tax incentive that allows employers of first time workers between 18 and 29 years a tax deduction of 50 per cent of the worker wage from their tax bill. In its first month of operation it already had 56 000 beneficiaries.
Over the last 20 years government has managed the fiscus and economy in a balanced and responsible manner which has given rise to a high level of macro-economic stability, reduction in taxes, control of the fiscal deficit and the provision of much needed social services and infrastructure development.
The 2014 National Budget has again demonstrated the commitment to fiscal restraint and discipline. These actions are in direct contrast to talk among our detractors that our prudent economic plans would be abandoned in favour of increased spending ahead of the elections.
Government has shown that it is steering the economy in a way that looks after the most vulnerable in our society and at the same time encourage growth without jeopardising its stability.
The spending on social assistance has risen from R75 billion in 2008/09 to R118 billion this year. The number of grant recipients has also increased from 13.1 million in 2009 to 15.8 million today.
Through the industrial incentives which totalled R22 billion over the past five years 128 projects have been approved under the Automotive Investment Scheme, and more than 460 companies have benefited from the Clothing and Textiles Competitiveness Programme. Over the next three years R21.8 billion has been earmarked to support our industries.
Impressively, South Africa’s economic story over the last five years has been penned against a backdrop of an unprecedented economic cataclysm that sent the world economy into a sharp downturn.
Under the leadership of President Jacob Zuma government charted a course to ride out the global recession and adopted a counter cyclical approach of spending on infrastructure development to help stimulate the economy.
Government has invested R1 trillion on infrastructure over the past five years and will invest R847 billion over the next three years.
Minister Gordhan said: “And so although the great waves of financial turbulence and the slow growth in developed economies have constrained our economic recovery, we have recorded positive growth since 2010...we have saved this country from the worst.”
While our economy still has a long road ahead as we deal with the after effects of the global economic recession, government has a clear vision through the National Development Plan, our blueprint for development over the next 20 years, of what needs to be done.
The 2014 national budget prepares the ground for the next phase of our economic and social transformation as it moves us firmly to the implementation of the NDP.
The NDP offers an opportunity for united action to radically change our economy and to continue the good story of a country on the move. It is a story that must be written by us all.
Phumla Williams is acting CEO of the Government Communication and Information System (GCIS)
