We welcome the appointment of Cyril Ramaphosa as President of South Africa.
We trust that this will usher in a period of political stability, respect for the rule of law and the institutions of governance and policy certainty – without which there cannot be the necessary social and economic development of our country.
This is a pivotal moment for the country. Better leadership has been a goal for progressive elements of civil society for several years, and it is being achieved through a concerted effort across party lines as well as the state, business and community sectors.
Since Mr Ramaphosa assumed office as President of the ANC, there have been encouraging signs that the government is willing and able to tackle corruption and bad governance, in the state and private sector.
While he will have our full support in any effort to improve the lives of all South Africans, we will continue to be vigilant and to work with other business organisations and broader civil society to protect the rule of law and advance good governance in the country. Any vestiges of corruption from the past regime must be uprooted and those involved investigated and prosecuted.
We look forward to the 2018 budget, which will be an important marker for the new administration.
We accept that there are no easy choices to be made and that more demands will be placed on all South Africans to repair the damage done to the economy in the past ten years. As the banking sector, we are ready to play our part.
A priority must be avoiding a further credit rating downgrade after the presentation of the Budget, now scheduled for 21 February. Downgrades would mean the state would have to pay more interest on its loans, and less funds would be available for social development and other essential programmes.
We agree that the Budget must focus on job creation and economic growth, but our fiscal boundaries and expenditure ceiling must be respected. Two percent growth or more is achievable if South Africa can provide policy certainty and overcome its implementation deficit.
The Budget will have to consider how government can increase tax receipts and broaden the tax base. The Minister of Finance needs to look at possible increases in Value Added Tax (VAT) and corporate tax, and the potential impact on the vulnerable as well as economic growth.
We would also urge government to tighten administrative controls so that irregular expenditure by government departments is significantly reduced from the R45 billion identified in the 2016 – 17 financial year. This would make a substantial contribution to the fiscus.
The public-sector wage bill continues to be one of the biggest budgetary challenges. It must be responsibly managed down through engagement between the government and public-sector unions.
We are opposed to tapping into the Public Investment Corporation, Unemployment Insurance Fund or Financial Services Board unclaimed benefits funds as a stop-gap measure to fund operating costs and plug deficits.
Maladministration in key departments like mining, energy, public enterprises and social welfare must end, as it hinders development and threatens social and economic stability. Public trust in the revenue service must also quickly be restored.
Cleaning up state-owned enterprises and providing policy certainty in the mining industry, among others, will help to reduce the demands on the fiscus and encourage investment.
BASA will continue to work with government to find constructive solutions to challenges such as the distribution of social grants, the provision of free education and land reform.
We wish President Ramaphosa and his finance minister the best in the coming months. We will work with them in good faith to make the best of this opportunity to revive the economy and renew our country, with the goal of establishing a virtuous circle of good governance, growth, investment and employment.