Government support of EC economy now critical

Issued by Retief Odendaal, MPL
Shadow MEC for Finance

The tabling of the Eastern Cape Adjustments Appropriation Bill later this month is a unique opportunity for the ruling ANC to batten down the hatches and ensure that we survive the worst economic effects of the COVID-19 pandemic. It presents a unique opportunity to ensure that government plays the enabling roll that local business so desperately needs to survive.

The economy of the Eastern Cape will not be spared the devastating impact that the COVID-19 lockdown has had on world economies, even as we ease into level 2 lockdown and businesses and reopen.

The Eastern Cape already has the highest unemployment rate in the country, at 40,5%, and has a Gross Domestic Product per capita 39% lower than that of the national average.

Now is the time for the Eastern Cape government to do everything in its power to ensure the aftermath of the COVID-19 pandemic does not destroy our already fragile economy. There is only one way of achieving this. Government and private sector must work together to find solutions.

The Democratic Alliance will table the following five-point plan for consideration in the Adjustments Budget:

  1. The Establishment of a Tourism Recovery Fund. The Tourism industry has been one of the hardest hit by COVID-19 as a result of international and local travel bans.
  2. The Establishment of a Provincial SMME COVID Support Fund. Savings within the existing budget of at least R1 Billion should be utilised to support small and medium enterprises who have not benefitted from other support funds;
  3. Additional Budget to be made available and set aside for urgent Drought Relief measures for struggling farmers;
  4. Establishment of a once-off bailout fund for cash strapped municipalities, which are willing to implement a strict financial turnaround plan that must be monitored by Provincial Treasury
  5. Budget virements to be effected to non-core service delivery related spending, to prioritise spending on capital infrastructure projects.

These priorities could easily be funded by:

  • a combination of budget cuts that will enforce operational efficiencies
  • budget virements that would see funding directed away from projects and/or programmes that are likely to see a significant underspend for the financial year
  • the rationalisation of the operations of some of our provincial entities and finally, cost containment insofar as the provincial wage bill is concerned.

The DA will continue to play a facilitating roll between government and the private sector and call on Premier Oscar Mabuyane to initiate interactions between government and the Eastern Cape business fraternity so that we can rebuild our economy.

Now more than ever we need all hands on deck in order to put our province and our country first.