Shortly after the Finance Minister’s budget speech, Khanyisa Cingo-Ngandu engaged in a thought-provoking discussion with Sipho Mhaga (SNG GT Customs ) and Professor Nyankomo Marwa (JBS Faculty), focusing on strategies to enhance South Africa’s global competitiveness. This conversation took place prior to the High Court’s ruling invalidating the hike. Their dialogue centred on addressing South Africa’s persistent low growth since the 2008 financial crisis, with emphasis on:
- Resource allocation to stimulate economic progress amid challenges like global trade policy volatility and unsustainable debt levels.
- Limited available resources ( Pre-VAT increase reversal), how the budget balanced fiscal constraints, required social expenditure, investment in infrastructure with inclusive growth goals.
Podcast highlights
Key discussion points:
Infrastructure investment to improve regional trade
- South Africa’s strategic role: The need to strengthen infrastructure investment to cement the country's position as Africa’s trade gateway.
- Insights from Sipho Mhaga:
- Rising logistics costs and deteriorating roads due to overuse.
- Environmental concerns such as dust pollution.
- Inefficiencies and higher accident risks affecting all road users.
Addressing border congestion & export diversification
- Beit Bridge Border Post: Discussed chronic congestion challenges.
- Port Alternatives: Explored potential for diversifying export routes through underutilized ports.
Education, research and resource constraints
- AI readiness: Prof. Marwa contrasted China’s aggressive AI training programs with South Africa’s lagging preparedness for future workforce demands.
- Case study: Cited research showing AI could reduce agribusiness costs by up to 70% in Africa improving our competitiveness.
- Higher education barriers: Noted South Africa’s alarmingly low acceptance rates for eligible matriculants into tertiary institutions
The reversal of the VAT increase adds a new complexity to the need to invest in key areas to advance development if no acceptable alternative to closing the funding gap is found. We will be monitoring any developments from the Treasury in relation to how the revised budget will balance infrastructure, education, and trade priorities while addressing systemic challenges like unemployment and inequality.
