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MEC Sakhumzi Somyo's 2017 Budget Speech somewhat welcome by business and opposition

Mar 3, 2017
MEC Sakhumzi Somyo's 2017 Budget Speech somewhat welcome by business and opposition

Eastern Cape MEC for Finance, Sakhumzi Somyo's, 2017 Provincial Budget Speech, which he delivered on Thursday afternoon in the Eastern Cape Provincial Legislature in Bhisho, has received mixed reactions from business and political parties.

MEC Somyo tabled a R74.4 billion budget for the 2017/2018 period. R61.8 billion is equitable share from the national government, R11.29 billion is conditional grants and R1.5 billion is provincial income (or only 2% of the total budget). 

The MEC said that since 2013, the Eastern Cape has lost around R10 billion in equitable share from national government.

He allocated R32.9 billion to the Eastern Cape Department of Education (over 44% of the total budget); R21.7 billion (29.2% of the total budget) was given to the Eastern Cape Department of Health while R2.6 billion each to the Departments of Social Development and Human Settlements.


Speaking to local radio station, Algoa FM News, the Nelson Mandela Bay Business Chamber, said that the 2017 Eastern Cape budget was not balanced enough to achieve the desired growth in the Eastern Cape.

Nelson Mandela Bay Business Chamber CEO, Kevin Hustler, said more effort is needed to roll out 'game-changing' projects that can boost growth by more than 5%.

He called on the provincial government to urgently lobby Transnet and the National Department of Public Enterprises to expedite the move of the tank farm and manganese ore facility from the Port of Port Elizabeth to Coega.

Hustler did welcome MEC Somyo's focus on the six pillars of the Provincial Economic Development Strategy - agriculture, oceans economy, tourism, renewable energy, light manufacturing and the automotive industry.

"While we realise the importance of improving the quality of education and healthcare in the province, the lion's share allocation of 89% of the Budget to social sectors, leaves little room for growing the economy to the desired levels we want achieved," told the station.

Hustler agreed that indeed more investment is needed for the Eastern Cape, and welcomed the provincial government's committment to addressing the constraints of doing business and the cost of doing business in the province.

"We also welcome his announcement of further cost-cutting measures for the departments, and the undertaking to allocate 50% of provincial spend to local suppliers. Many SMEs and local businesses do still find that they are not being paid within the 30-day period, and we again call on government to adhere to this timeline," Hustler said.

No bold announcements in Eastern Cape 2017 Budget Speech

There were no bold pronouncements to deal with some of the key issues impacting on the province, according to the Democratic Alliance (DA) in the Eastern Cape.

"This province is desperate for job creation and economic growth. How can this happen when the budget for the lead department of Economic Development, Environmental Affairs and Tourism’s budget is decreased by 7%, compared to the previous year?" asked  Bobby Stevenson MPL, the DA's Eastern Cape Shadow MEC for Finance.

"Whereas MEC Sakhumzi Somyo spoke about broadband rollout for government departments, he said nothing about the crying need for free wi-fi hotspots throughout this province, particularly in all provincial libraries. This is a definite game-changer when it comes to economic growth.

"Our bureaucracy continues to remain bloated, at 64.6% of the whole budget with no positive steps announced to rationalise the high cost of public entities which was alluded to in his previous budget speech."

Stevenson said that the whole issue of medico-legal costs is a dark shadow hanging over this budget with the province facing 2 000 claims and having to allocated R17-billion to contingent liabilities for this. Currently, vehicles of the health department are being attached because it can't pay for these claims.

"We welcome the increases of 12% for the Roads Maintenance Infrastructure Grant and 12% for the Human Settlements Development Grant.

"The DA believes that boosting economic growth and redirecting resources to core business along with a comprehensive expenditure review will place this province on the high road to opportunity and prosperity," Stevenson said.

The Congress of the People (COPE) in the Eastern Cape said that while MEC Somyo's 2017 Budget was great, they were concerned that the might be mispent.