Budget Speech 2022Supporting Economic Reconstruction and Recovery |
Madam Speaker, we have had more than a decade of economic stagnation.
Only through sustained economic growth can South Africa create enough jobs to reduce poverty and inequality; enabling us to reach our goal of a better life for all.
The Economic Reconstruction and Recovery Programme remains essential to growth.
We are accelerating the implementation of critical structural reforms contained in the ERRP in particular, in electricity, rail, ports and telecommunications.
Infrastructure
To complement these interventions, Madam Speaker, we will be accelerating infrastructure investment which is the backbone of a thriving economy.
The National Treasury will be implementing the results of a recently completed review of the Public-Private Partnerships framework.
We aim to create a centre-of-excellence for PPPs and other blended finance projects.
This centre-of-excellence will be established with direct Treasury oversight.
It will be a direct interface with private financial institutions for investments in critical government infrastructure programmes.
We will also work with other national departments and the provinces of the Eastern Cape and Northern Cape, to pilot a revised approach to infrastructure delivery.
This approach will include innovative financing and delivery mechanisms, as announced by the President in the State of the Nation Address.
Regarding the Umzimvumbu Dam, we are at an advanced stage of resolving the project issues. We will make further announcements on this in the MTBPS.
In October, I will table amendments, through the 2022 Division of Revenue Amendment Bill, to enable provinces to pledge their infrastructure grants to leverage more financing to fast-track the rollout of infrastructure.
Mr, President; in the State of the Nation address you spoke about the importance of catalytic and blended finance projects. These projects have the potential to crowd in private investors for bulk infrastructure.
As we upgrade roads, bridges, water and sewer, transport, school infrastructure and hospitals and clinics, the aim is to unlock higher levels of employment for those involved in the projects.
I am pleased to inform this House that a provisional allocation is set aside in this Budget for R17.5 billion over the MTEF for infrastructure catalytic projects. We look forward to engaging with specific proposals in this regard.
Value for money and quality of delivery is the top priority in the development of the project pipeline.
Bounce-back scheme to support SMEs
To support businesses in distress owing to the Covid-19 pandemic, a new business bounce-back scheme will be launched, using two mechanisms which will be introduced sequentially:
Firstly, small business loan guarantees of R15 billion will be facilitated through participating banks and development finance institutions. This allows access for qualifying non-bank small and medium loan providers.
Government will partner with loan providers by underwriting the first 20% of losses for banks and other eligible small and medium loan providers.
The eligibility criteria, including the requirement for collateral, has been loosened.
This mechanism will be launched and operational next month.
Secondly, by April this year, we intend to introduce a business equity-linked loan guarantee support mechanism.
We intend to bring the total support package through the bounce-back scheme to R20 billion.
The equity support mechanism of this scheme will be facilitated through DFIs. It will also be available to qualifying non-bank small and medium finance providers.
Details of the terms of the equity-linked guarantee mechanism will be provided soon.
Public employment
Over the medium-term, R76 billion is allocated for job creation programmes.
In this Budget an additional R18.4 billion is made available for the Presidential Employment Initiative.
Madam Speaker, we do not aspire to be a below 2 per cent growth economy. We are capable of so much more.
In this regard, we are refining proposals for an expanded reform agenda – to shift our economy towards a higher growth trajectory.